Abu Dhabi's ADNOC Signs $5.8 Bln Deals With Eni And OMV

(RTTNews) - The Abu Dhabi National Oil Company or ADNOC said it signed two new strategic equity partnerships with Eni and OMV covering both ADNOC Refining and a new trading joint venture, which will be jointly established by the three partners.

ADNOC noted that Eni and OMV will acquire 20% and 15% shares in ADNOC Refining respectively, with ADNOC owning the remaining 65%. The agreement values ADNOC Refining, which has a total refining capacity of 922,000 barrels per day, and which operates the fourth largest single site refinery in the world, at an enterprise value of $19.3 billion.

As a further part and condition of this agreement, the partners will also establish a trading joint venture, in which Eni and OMV will own 20% and 15% of the shares respectively. Proceeds to ADNOC from the sale are estimated to be $5.8 billion, subject to completion adjustments.

ADNOC said that further value will be created from the new global trading joint venture, which, once established, will be an international exporter of ADNOC Refining's products, with export volumes equivalent to approximately 70 per cent of throughput. Domestic supply within the UAE will continue to be managed by ADNOC.

Under the terms of the agreements, ADNOC, Eni and OMV's trading joint venture will be incorporated at Abu Dhabi Global Markets. Physical and derivative trading will likely begin as early as 2020 when all necessary processes, procedures and systems are in place. Eni and OMV will provide ADNOC with know-how, operational experience and support to accelerate the development of the trading joint venture, enabling ADNOC and its partners to optimize their systems and better manage their international product flows.

The transaction is expected to close in third-quarter 2019, subject to customary closing conditions and regulatory approvals.

Separately, Eni confirmed that the agreed terms for the 20% equity interest acquired by Eni include a cash price of approximately $3.3 billion after deduction of the net debt and subject to closing adjustments, which corresponds to an enterprise value of approximately $3.9 billion (Eni share).

In a Separate press release, OMV confirmed it signed agreements for a 15% share in ADNOC Refining.

The estimated purchase price for OMV amounts to approximately US$2.5 billion based on 2018 year end net debt. The final purchase price is dependent on the net debt as of closing and certain working capital adjustments. The enterprise value for 15% amounts to US$2.9 billion. The transaction will be accretive to OMV's earnings per share from the first year onwards, OMV said.