EC Clears Engie E&P Takeover

The European Commission has approved a deal whereby French utility Engie will sell its 70% interest in Engie E&P to UK-based Neptune Energy. However it may be another few months before the deal is completed.

The deal was announced in May 2017 and officially notified to the commission October 2. It said the acquisition will be effected by way of a share purchase agreement that was formally signed September 22. Chinese sovereign wealth fund CIC retains its 30% interest in Engie E&P, acquired 2011.

The commission said the formal acquisition will be by US private equity group Carlyle, Luxembourg-based CVC Capital Partners SICAV-FIS, and CIC. It said the deal raises no upstream competition concerns, given the small market shares held by the purchasing companies, and the significant number of competitors in the sector.

Engie told NGW October 30 that: "As announced in May, completion is still expected by early Q1 2018."

Carlyle said in May that Neptune Energy had proposed to acquire Engie E&P for $3.9 bn (€3.6bn). The takeover by Carlyle- and CVC-backed Neptune will mean Engie's complete exit from the upstream, with the exception of a partial stake in Algeria. 

The French utility said in May it would keep a 30% interest in the Touat gas project (currently Engie E&P 65%, Algerian state Sonatrach 35%) now under development in southwest Algeria, which is now officially due to start production in 2018, delayed from its original start date of 2016.

Engie is engaged in a multi-billion euro asset disposal programme, which includes its E&P business. Last week it also confirmed talks to sell its up- and midstream LNG activities to Total.

Mark Smedley