BP, ADNOC to buy 50% of Israel's NewMed Energy for $4bn

The offer would see the duo acquiring NewMed's free floating shares as they plan to form a joint venture "focused on gas development in international areas of mutual interest including the East Mediterranean".

“When completed, this would strengthen the broader strategic partnership between ADNOC and bp across oil and gas, hydrogen and carbon capture and storage technology and would deepen the partners’ long-standing relationship,” BP said in a statement.

“This proposed transaction is consistent with BP’s stated strategy and financial frame including current guidance for capital expenditure. The two companies intend to explore a range of mechanisms for the formation and potential further expansion of their new partnership.”

The offer price is 12.05 Israeli shekels ($3.38) per share, reflecting a 72% premium to the pre-deal market price, for a total of 14.1bn shekels, or $3.96bn, NewMed said in a statement.

After the deal closes NewMed will become a private corporation equally held by the BP-ADNOC JV and Delek Group, which holds the remaining 50%.

NewMed is the largest stakeholder in the Leviathan offshore field operated by Chevron, which produces gas that supplied to Israel, Egypt and Jordan.

Reporting by Frank Prenesti for Sharecast.com