OIL AND gas firm Schlumberger is set to acquire a 45.65 per cent minority shareholding in Russian company Eurasia Drilling for around $1.7bn (£1.1bn).
The deal will involve Eurasia delisting from the public market, which is slated to take effect from 23 February.
The transaction will deliver $22 a share to shareholders, which represents a premium of 81.1 per cent on Monday’s closing price.
The price Schlumberger has agreed to pay includes the cost of a call option and various non-competition agreements.
The call option will allow the firm to purchase the remaining shares in Eurasia during a two-year period commencing three years from the closing of the transaction.
Roderick Peacock, chairman of Xenon Capital Partners, which is advising Eurasia Drilling’s core shareholders, said: “The sharp reduction in oil and gas prices over the last six months is likely to result in industry consolidation because of lower exploration and production activity. In this context, the proposed transaction offers minority shareholders the opportunity to realise a very substantial premium.”
He added that the deal would establish an “exceptionally strong platform for delivering drilling services to Russia’s oil and gas industry as future market conditions stabilise”.
Kirill Dmitriev, chief executive of the Russian Direct Investment Fund, commented: “This is a real vote of confidence by a major global company in Russian growth opportunities and the fundamentals of the oil and gas sector, in particular.”