Abu Dhabi National Energy Company (Taqa) will buy Canada’s PrimeWest Energy Trust for C$5 billion (US$4.9 billion) in cash.
Abu Dhabi National Energy is offering C$26.75 per PrimeWest unit, a 27% premium to the 30-day weighted average price for the trust’s units, PrimeWest said in a statement.
Taqa has been buying upstream assets in Europe and Canada as part of an investment plan to become a global energy player.
Taqa, 75-percent owned by the Abu Dhabi government, plans to quadruple its assets to $60 billion in five years as the Gulf state looks to use its oil revenue to diversify its holdings.
The acquisition is Taqa’s third in Canada this year, and more than fulfills a pledge chief executive Peter Barker-Homek made last month, to spend $3 billion over 12 months on acquisitions to boost the output of its newly formed Canadian unit, Taqa North, to 100,000 barrels of oil per day, Reuters reported.
“This acquisition is a major leap forward for Taqa globally, and an important step toward the achievement of our strategy to grow to C$20 billion in Canadian assets,” Barker Homek said in a statement. “We believe that the PrimeWest assets are an excellent fit with our business objectives.”
PrimewWest produced 40,226 barrels of oil equivalent per day of oil and natural gas in the second quarter, adding to about 47,000 bpd of current production from Taqa North.
PrimeWest has agreed to give Taqa two days to match a higher offer and will pay the Abu Dhabi state-controlled firm a C$75 million break fee if the deal isn’t completed.
The acquisition is expected to face a unitholder vote in late November and should close shortly after, PrimeWest said.
PrimewWest units rose C$6.75, or 33%, to C$26.69, in morning trading on the Toronto Stock Exchange.