Eni And Var Energy Agree To Buy Neptune Energy, With Combined Value Of Around $5B

Eni SpA E and Vår Energi ASA inked a deal to buy Neptune Energy Group Limited., an exploration and production company with a portfolio of gas-oriented assets and operations across Western Europe, Australia, North Africa, and Indonesia. 

As per the acquisition terms, Eni will acquire the Neptune Global Business outside of Norway and Germany for an enterprise value of around $2.6 billion, while Vår Energi will buy Neptune's Norway Business under a separate share purchase agreement for an enterprise value of about $2.3 billion.

The final net consideration for both transactions will be paid in cash at completion and is subject to customary closing adjustments. 

Eni expects to fund the acquisition through available liquidity. The acquisition is expected to close in the first quarter of 2024, upon customary closing conditions.

The Vår transaction will close immediately before the Eni deal, with the proceeds from the Norway sale remaining with the Neptune Global Business bought by Eni. 

Vår is a company listed on the Oslo Stock Exchange and is 63% owned by Eni.

Synergies: Eni expects to generate over $0.5 billion of G&A and industrial synergies, with additional cost synergies, exploration, and development.

Accretive: The company expects transactions to be immediately accretive to earnings, CFFO per share, and FCF positive and at par with the previously disclosed 2023-2026 guidance.

For 2023-2026, the company projects a production CAGR of 3%-4%, a net positive contribution from portfolio activities of around €1 billion, organic capex of €37 billion and leverage within a 10% to 20% range.

Price Action: E shares are trading lower by 1.45% at $27.79 premarket on the last check Friday.