BP snaps up Archaea Energy in $4.1bn deal

BP said on Monday that it has agreed to buy US renewable natural gas producer Archaea Energy in a $4.1bn deal.

The British energy giant will pay $26 per share in cash for the New York-listed firm and take on around $800m in net debt, giving it an enterprise value of $4.1bn.

BP said the acquisition would accelerate its "strategic bioenergy transition growth engine". Archaea operates 50 RNG and landfill gas-to-energy facilities across the US.

It also expects the deal to double biogas earnings before interest, tax, depreciation and amortisation to around $2bn by 2030, and push EBITDA across all its transition growth businesses to more than $10bn from $9bn-$10bn, also by 2030.

Dave Lawler, chair of BP America, said: "Our biogas team is already one of the leading suppliers of renewable natural gas in North America. This deal accelerates our ability to deliver cleaner energy, generate significant earnings…and help reduce emissions."

Nick Stork, Archaea chief executive, added that the acquisition would help Archaea "realise its full potential".

Shares in Archaea surged 53% in pre-market trading in New York, while BP’s Wall Street-listed shares were up 2%. In London, BP was flat at 454.6p.