Financial Daily from THE HINDU group of publications
Tuesday, Aug 23, 2005
Financial Daily from THE HINDU group of publications Tuesday, Aug 23, 2005 |
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Petroleum Corporate - Mergers & Acquisitions ONGC-Mittal combine loses bid for PetroKazkhstan — China's CNPC clinches deal for $4.18b Our Bureau
New Delhi , Aug. 22 IN a narrow miss, Oil and Natural Gas Corporation Ltd (ONGC) and the L.N. Mittal group (LNM) combine has lost the bid to acquire the Canada-based PetroKazakhstan Inc to the Chinese company, China National Petroleum Corporation (CNPC). Initially, CNPC was understood to have been trailing behind the bid of nearly $3.6 billion put in by ONGC-Mittal. However, the Chinese firm is said to have subsequently raised its price higher than the ONGC bid. PetroKazakhstan is a Canadian oil firm operating in Central Asia. CNPC finally acquired PetroKazakhstan Inc for $4.18 billion, the Calgary-based PetroKazashstan said in a press release on Monday. The statement said that the state-run Chinese oil firm has agreed to pay $55 a share in cash, which is 21 per cent more than its closing share price on Friday. Petrokazakhstan was the maiden bid put in by the ONGC-Mittal combine through its newly formed partnership. The partnership between ONGC and the global steel magnate, Mr L. N. Mittal, was announced recently. ONGC had teamed up with the Mittal group to leverage the steel maker's dominant position. Out of the 14 countries Mittal Group has a business interest in, 6-7 have oil and gas opportunities. This was the first company which ONGC had bid for jointly with the world's largest steel producer.ONGC sources told Business Line that the ONGC-Mittal combine lost narrowly to CNPC. The announcement has surprised ONGC-Mittal, since it came even as PetroKazakhstan sought certain clarifications from the combine. The sources said ONGC's overseas arm ONGC Videsh Ltd (OVL) was asked to give some clarifications on the bid over the weekend. OVL was supposed to submit its clarification on Monday, but the sale announcement came before that. On whether the ONGC-Mittal combine was not given a chance to match or re-bid, the ONGC sources remained non-committal. PetroKazakhstan made the sale announcement at 7.30 a.m. GMT (1 p.m. IST), at least a couple of hours ahead of the scheduled filing by the ONGC-Mittal combine at the London office of the merchant banker. PetroKazakhstan accounts for about 12 per cent of oil production in Kazakhstan and owns 500 million barrels of reserves, 150,000 barrels a day of crude output and a refinery in Kazakhstan.
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