Canada OKs Sale Of Oil Co.
A Canadian court has approved a $4.2 billion takeover of PetroKazakhstan by China's largest oil company, China National Petroleum Corp., clearing the final potential obstacle to China's biggest foreign acquisition yet.
The Alberta Court of Queen's Bench approved the purchase on Tuesday and the deal was due to close on Wednesday, a news release said. Calgary, Alberta-based PetroKazakhstan has all of its energy assets in the former Soviet republic of Kazakhstan.
The purchase at $55 cash per share by a unit of state-owned China National Petroleum, or CNPC, is the biggest in a series of overseas takeovers by Chinese companies. It also is a coup for Beijing in its effort to secure foreign energy supplies for its booming economy.
China has been acquiring oil and gas assets across the globe, in Sudan, Venezuela and Australia. PetroKazakhstan fits well with its strategy of tapping Central Asian oil to help fuel industries in inland and western parts of the country. A pipeline between the two countries is already under construction.
The court's approval foiled an effort by Russian oil company Lukoil to stall the deal, which was approved by 99 percent of PetroKazakhstan's shareholders, until its right to shares in a 50-50 joint venture, called Turgai Petroleum, could be determined.
Turgai Petroleum holds about 20 percent of the Canadian company's total reserves.
Lukoil contended that its agreement with PetroKazakhstan gave it right of first refusal to buy PetroKazakhstan's stake. It said it was prepared to acquire 100 percent of PetroKazakhstan at the same price and on the same conditions as CNPC's offer if the court did not approve the deal.
The Russian company said it tried but failed to reach an agreement with CNPC to buy 50 percent of Turgai Petroleum at a "fair price."
Other major oil companies, including a joint venture of India's ONGC Videsh, a unit of Oil and Natural Gas Corp., had also expressed interest in PetroKazakhstan.
CNPC's purchase follows a failed bid by Hong Kong-based CNOOC Ltd., a unit of China's biggest offshore oil company, to buy California-based Unocal Corp. following opposition from U.S. politicians. China's biggest foreign acquisition to date has been Lenovo Group's $1.75 billion purchase of International Business Machines Corp.'s personal computer business earlier this year.
PetroKazakhstan's shares closed at $54.45 on Monday on the New York Stock Exchange. The stock has stayed at roughly the same level since the deal with CNPC was announced in August, above its previous 52-week high of $46.92.