China's oil behemoth Sinopec has made a US$7.22 billion takeover bid Wednesday for the international oil and gas exploration company Addax Petroleum.
The takeover bid would give Sinopec access to Addax's stakes in oil fields off the coast of West Africa, as well as in Iraq. Sinopec, formally known as the China Petroleum and Chemical Corporation, is offering 52.80 Canadian dollars (US$45.70) a share for the remaining common shares of Addax.
The Addax board has recommended that shareholders accept the agreement, and senior executives have signed onto a lock-up agreement to sell Sinopec their 38 percent stake in the company, the New York Times reported on its website.
Jean Claude Gandur, the president and chief executive of Addax, said in a statement announcing the deal that the company was "pleased that Sinopec has recognized the highly attractive asset portfolio and exceptional team that we have assembled."
In a separate statement, Sinopec called the deal a "transformational transaction" that would help it expand business in West Africa and Iraq. The Chinese company said that Addax's offshore deep-water exploration projects were promising for its growth and development.
Sinopec agreed to a breakup fee of 300 million Canadian dollars if the deal fell through. Full documentation for the bid was expected to be submitted next month, and Addax, which is based in Switzerland but has shares listed in Toronto and London, would have 35 days to accept it.
Addax shares rose 7.3 percent on Wednesday in Toronto, to 48.96 Canadian dollars.
By People's Daily Online
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