Addax Petroleum in US$7.2bn takeover

Published: June 29, 2009

On June 24, Sinopec, a Chinese international petroleum exploration and production company, will take over Addax Petroleum, a Swiss-based international oil and gas explorer with a strategic focus on West Africa and the Middle East, in a US$7.2bn deal.

It will secure access to the Taq Taq oil field in the Kurdish area of Northern Iraq as well as other promising assets in West Africa.

Credit Suisse is financial advisor to Sinopec on the deal. RBC Capital Markets is the financial advisor to Addax Petroleum’s board of directors. The Chinese state-controlled oil company will acquire all of Addax’s outstanding common shares by way of a negotiated take-over bid for US$45.7 per common share in cash.

The offer represents a 47% premium to the closing market price on the TSX of Addax Petroleum common shares on June 5. According to Addax, the deal involves a break-up fee of US$260mn.

Sinopec Group is China’s largest producer and supplier of oil products and major petrochemical products.