Sinopec International Petroleum Exploration and Production acquires Addax Petroleum

Sinopec International Petroleum Exploration and Production Corporation (SIPC), through its wholly-owned subsidiary Mirror Lake Oil and Gas Company Limited, has acquired all of the outstanding common shares of Addax Petroleum Corporation, a Canada-based oil and gas exploration and production company.

SIPC is a wholly-owned subsidiary of China Petrochemical Corporation, a China-based oil and gas exploration, production, transportation, and marketing company.

Update on August 14, 2009:

SIPC, through its wholly-owned subsidiary Mirror Lake, has acquired 734,120 common shares, representing approximately 92.67% stake, in Addax Petroleum through a tender offer.

SIPC has extended the offer period until August 27, 2009.

Update on August 10, 2009:

SIPC has received all approvals required from the relevant government entities of China for its proposed acquisition of Addax Petroleum.

The offer is expected to close in the third quarter of 2009.

Update on July 9, 2009:

SIPC, through its indirect wholly-owned subsidiary Mirror Lake, has commenced its offer to acquire all of the outstanding common shares of Addax Petroleum.

Announcement (June 24, 2009):

SIPC has agreed to make an offer to acquire all of the outstanding common shares of Addax Petroleum by way of a negotiated take-over bid for CAD52.80 ($45.80) per common share in cash. The transaction is valued at approximately CAD8,270 million ($7,173.96 million).

The offer price represents a 47% premium to the closing market price on the Toronto Stock Exchange of the Addax Petroleum common shares on June 5, 2009.

The agreement also provides that if SIPC acquires not less than 66.66% of the outstanding Addax Petroleum common shares under the offer, SIPC will comply, or cause Addax Petroleum to comply, with the terms of the 3.75% convertible notes of Addax Petroleum due May 31, 2012.

RBC Capital Markets is acting as financial advisor, while Fasken Martineau DuMoulin LLP and Osler, Hoskin & Harcourt LLP are acting as legal advisors to Addax Petroleum.

Credit Suisse Group is acting as financial advisor, while Stikeman Elliott and Vinson & Elkins LLP are acting as legal advisors to SIPC.

Deal Value (US$ Million) 7173.96
Deal Type                Acquisition
Sub-Category             100% Acquisition
Deal Status              Completed: 2009-08-18

Deal Participants

Target (Company)   Addax Petroleum Corporation
Acquirer (Company) Sinopec International Petroleum Exploration and Production Corporation

Deal Rationale

This acquisition would enable SIPC to expand and diversify its overseas assets and to gain access to reserves in West Africa and the Middle East. It would also facilitate SIPC to control Addax Petroleum's operations in the Taq Taq field in Iraqi Kurdistan and exploration acreage offshore Nigeria and Gabon.

Bid Premium ($ per share) 47

Related terms: acquisition, canada, china, exploration, gabon, government, iraq, legal, market, marketing, oil and gas, petroleum, transportation