United Energy Group said it would buy Kuwait Energy (IPO-KEC.L) for up to $651 million as the Hong Kong-listed upstream oil and gas company aims to enter the Middle East and North Africa markets.
The deal will transform United Energy into a medium-sized international independent oil and gas company with a diversified portfolio of assets, while further expanding its development potential, it said in a filing to the Hong Kong stock exchange.
Kuwait Energy has an upstream focus and is involved in exploration, appraisal, development and production activities in several countries, including Iraq, Egypt, Yemen and Oman, United Energy said.
United Energy, headquartered in Hong Kong with offices in Beijing and Pakistan, has agreed to buy $491 million in Kuwait Energy’s common shares and $160 million in convertible shares via a wholly-owned subsidiary, according to the filing.
The deal will give Kuwait Energy an enterprise value of $900 million, according to a person familiar with the transaction.
Energy and power has been the most active sector in Asia-Pacific in terms of M&A deal value so far the year, accounting for some $117 billion, or 14.3 percent of the region’s total deals.
Founded in 1992, United Energy acquired BP’s assets in Pakistan in 2011 for $775 million and has since invested heavily in that country, according to the company’s website.
It is now the fourth-biggest energy and power company listed on the Hong Kong bourse, and says it is looking for high quality international upstream M&A opportunities.
United Energy’s chairman Zhang Hongwei has a 71 percent controlling stake in the company.
JP Morgan advised United Energy on the transaction, while energy-sector investment bank Tudor, Pickering, Holt & Co advised Kuwait Energy.