Repsol reaches an agreement with Talisman energy to acquire the canadian oil company
Repsol has entered into an agreement to acquire 100% of Canadian oil company Talisman Energy worth US$8.3 billion (EU6.64 billion) plus debt.
The transaction has been unanimously approved and recommended by the Boards of Directors of Talisman Energy and Repsol.
- The deal will transform Repsol into one of the largest energy groups worldwide, increasing its presence in politically-stable OECD countries and reinforcing its upstream business, which has become the company’s growth engine.
- Repsol intends to demonstrate the benefits to Canada and is excited to include Talisman’s talent and assets in its own world class operations. Calgary (Canada) will become one of the largest corporate centers outside Spain.
- Talisman will contribute first class producing and exploration assets in North America (Canada and U.S.), South-East Asia (Indonesia, Malaysia and Vietnam) as well as Colombia and Norway, amongst others.
- Repsol will increase its output 76% to 680,000 barrels of oil equivalent per day and will boost reserves by 55% to more than 2.3 billion barrels of oil equivalent.
- The purchase will reinforce Repsol’s upstream unit by diversifying and improving the quality of its assets and increasing its growth potential.
- Once the transaction is complete, North America’s weight in the resulting company will increase to almost 50% of capital employed in exploration. Latin America will represent 22%.
- Canada and U.S. currently make up 10% of Repsol production, and the resulting company will allocate 30% of its capital employed to the region, totaling approximately US$15 billion.
- Repsol’s well-established presence in Canadian communities in which it operates high quality oil and gas assets and existing infrastructure will provide a strong base from which to continue planned growth in Canada. Repsol has been actively investing in Canada with exploration activity offshore East Coast and is a major partner in the Canaport LNG facility located in New Brunswick.
- This transaction is made possible due to Repsol’s sound financial management practices and its proven track record of creating value from transformative growth opportunities.
- The acquisition will be financed with cash essentially obtained from the recovery of value from YPF following its expropriation (US$6.3 billion) as well as other sources of liquidity available to the company.
- The transaction, based on an offer of US$8 (6.4 euros) per share, will be accretive for Repsol in financial and operating terms from the first full year after integration.
This is the largest international transaction by a Spanish company in the last five years. Total employed capital will increase 50%.
The combined company will be among the 15 largest privately-owned oil and gas companies in the world, present in key areas and with the most potential worldwide.
The transaction will be completed with a Plan of Arrangement, and is subject to the approval of the Canadian courts and Talisman shareholders. The transaction is expected to be complete in mid-2015.
Antonio Brufau, Chairman of Repsol:
“This is a transformative and exciting deal which will make us one of the world’s most significant players and which will allow us to grow as a company and reinforce Repsol as a solid and competitive integrated player.”
Josu Jon Imaz, Repsol Chief Executive Officer:
“The agreement with Talisman is the result of an exhaustive analysis of more than 100 companies and assets worldwide. In every area, Talisman has always been the best option, because of the excellent quality of its complementary global assets, including its talent. With Repsol’s ability to support growth of these assets there is much value to be realized – it is a win-win situation and will transform Repsol.”
Chuck Williamson, Chairman of Talisman Energy:
“The deal underscores Repsol’s belief in the strong set of assets Talisman has worked hard to develop. Repsol is a world-class operator with a solid track record and the resources to continue the development of these assets within their international portfolio.”