20 May 2019, Stella Zlatareva, EMIS M&A Team
April's Top Deals per region
For a third consecutive month, a Russia-bound deal topped the Emerging Europe transaction ranking by value. Ending a decade-long investment, U.S. private equity group TPG agreed to exit Russia’s third largest grocery chain Lenta in a sale to Severgroup. The latter is the holding company managing the assets of Russian tycoon Alexey Mordashov and will acquire a combined 42% interest in Lenta for EUR 650mn (USD 730mn). Apart from TPG, the sellers include the European Bank for Reconstruction and Development (EBRD). The agreement precedes a mandatory buyout offer to the minority shareholders. Observers believe that Mordashov, who controls Russian online food retailer Utkonos, may be quick to merge the firm with Lenta to take on more digital-savvy rivals.
Africa and the Middle East
Saudi Arabian state-owned oil giant Aramco decided to top off a forty-year partnership with Royal Dutch Shell by agreeing to buy out its 50% stake in Saudi Aramco Shell Refinery Co (SASREF) for USD 631mn. The target is a refinery complex with a capacity of 305,000 barrels per day of LPG, naphtha, kerosene, diesel, fuel oil, and sulphur. The complex is located in Jubail Industrial city, in the Eastern province on the Persian Gulf coast. The refinery will be integrated into Aramco’s downstream business.
Latin America and the Caribbean
Petrobras’ long asset sale and deleveraging strategy led to the largest deal in the region in April. After an intense bidding process, a consortium led by French energy group Engie came on top with its USD 8.6bn offer. Engie and Canada’s Caisse de Depot are taking a 90% stake in Transportadora Associada de Gas, commonly known as TAG, while Petrobras will keep a 10% interest. TAG is the largest natural gas transmission network owner in Brazil, comprising 4,500 km of gas pipelines (about 47% of the country’s entire gas infrastructure.) Engie’s rivals in the bidding included groups led by Australia’s Macquarie Bank and the UAE’s Mubadala Investment.
The region’s largest transaction featured Chinese oil and gas services provider Zhejiang Renzhi, which agreed to acquire petrochemicals producer Ningbo Keyuan through a reverse takeover worth a total of USD 1.5bn. For Zhejiang Renzhi, the deal provides an opportunity to boost revenue following years of declining results. Ningbo Keyuan posted some USD 1.5bn in revenues last year through the sale of its petrochemical and chemical products.
Original source: EMIS - DealWatch