Italy’s Eni SpA hsa expanded its natural gas business with the joint acquisition of explorer Neptune Energy Group Ltd for $4.9 billion.
The deal was completed in conjunction with Eni-controlled Norwegian producer Var Energi.
Eni will take over Neptune Energy, one of the largest producers of gas in the UK’s North Sea, under a deal worth $2.6 billion (£2.1 billion).
Var Energi will buy Neptune's sites in the Norwegian continental shelf for a further $2.3 billion dollars (£1.8 billion).
Neptune’s German business will continue to run as an independent company, owned by its current shareholders, it said on Friday.
In one of the biggest deals in Europe in years, Eni will get control over Neptune’s assets in Australia, Algeria, the Netherlands and Indonesia.
Neptune chair Sam Laidlaw said: “Since Neptune’s formation in 2018, we have invested in the business and transformed the organisation, resulting in material improvements in safety, operational performance and cost efficiency.
“I am incredibly proud of Neptune’s achievements over the past five years – and the hard work and dedication of so many people across our organisation, who, together with our shareholders, have contributed to the growth and success of the business.
"The geographic and operational overlap is striking, adding scale to Eni's Vaar Energy, bringing more gas production and carbon capture and storage (CCSU) opportunities to the remaining North Sea footprint, building on Eni's leading position in Algeria and deepening Eni's presence in offshore Indonesia," Eni's Chief Executive Claudio Descalzi said.
Mr Descalzi also said that the acquisition would boost the outlook for the gas and LNG division, which last year was one of the drivers of the group's record earnings, and the potential for share buybacks to reward investors.
The transaction will strengthen Eni's gas division and boost the group's role as a supplier for Europe at a time when the bloc is still replacing the flows from Russia, analysts said.
"We would expect the acquisition to result in an upgrade to Eni's Gas & LNG division guidance over the medium term, given the acquisition will add four billion cubic metres of supply to Eni along with the potential for synergies via access to additional pipeline capacity," said Royal Bank of Canada's Biraj Borkhataria in a report.
