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Sinopec completes China's biggest foreign takeover

(Agencies)
Updated: 2009-08-18 17:38

BEIJING: Sinopec Group said Tuesday it has completed its $7.5 billion acquisition of Addax Petroleum, obtaining new reserves in Africa and the Middle East in China's biggest foreign corporate takeover to date.

State-owned Sinopec Group is the parent of Sinopec Corp., also known as China Petroleum & Chemical Corp., Asia's biggest refiner by volume. It wants to expand its production capacity to profit from rising crude prices that have cost it billions of dollars in recent years due to government caps on retail fuel prices.

Addax is China's biggest foreign corporate takeover but the deal is half the size of last year's $14.3 billion acquisition by Aluminum Corp. of China, with Alcoa Corp., of a 12 percent stake in global miner Rio Tinto PLC, according to financial information firm Dealogic.

Related readings:  Sinopec announces acquisition of Geneva-based Addax  Sinopec's bid for Addax gets nod

The previous record for a Chinese corporate takeover abroad also was in the petroleum industry -- last year's $2.5 billion purchase by China Oilfield Services of Norway's Awilco Offshore.

Addax, based in Geneva, has oil and gas exploration and production operations mainly in West Africa and the Middle East. It jointly operates the Taq Taq field in Iraq's self-ruled Kurdish region with Turkey's Genel Enerji.

In its announcement, Sinopec said it paid 52.80 Canadian dollars ($47.80) per share for 157.6 million Addax shares.

Addax, which is listed on exchanges in London and Toronto, says Sinopec promised to keep Addax's top management intact.

Sinopec: www.sinopec.com

Addax Petroleum: www.addaxpetroleum.com