Tuesday, December 22, 2015

Sinopec In Talks To Acquire Anadarko Petroleum

  EXCLUSIVE: Sinopec In Talks To Acquire Anadarko Petroleum


China Petroleum & Chemical Corp (ADR) SNP 0.39% -- commonly referred to as Sinopec -- is mulling a takeover of Anadarko Petroleum Corporation APC 3.65%, source familiar with the matter told Benzinga.

China Petroleum is an $89 billion market cap company involved in the crude oil and natural gas space. Anadarko is an independent exploration and production with a market cap of about $23.4 billion. Both stocks were trading lower on Monday, following weakness in the energy sector.

HSBC Bank is financing the deal, according to the source.

Shares of Anadarko spiked to a high of $47.72 on Monday following the news; The stock closed at $46.55, up 1.9 percent.

Stifel analyst Michael Scialla told Benzinga the rumor fits into the story around the China gas sector and the understood benefits of Anadarko inventory and Permian exposure. "A bid from a China company for Anadarko would make sense given APC inventories and Permian Basin exposure."

Scialla said Anadarko's inventory and exposure to Permian Basin jives with China story of oil and gas companies seeking oil inventory. The Permian Basin is a hot location and Sinopec would benefit from exposure there. However, the analyst thought Exxon Mobil Corporation XOM 0.54% looked to be the most likely buyer.

Oppenheimer analyst Fadel Gheit said that although anything is possible, a deal between Sinopec acquiring Anadarko has low probability, specifically a less than 50 percent chance due to regulatory concerns. However, he did say that Anadarko is believed to be a takeover target by other analysts.

Back in October, unconfirmed market chatter said Chevron Corporation CVX 0.72% was in advanced acquisition talks with Anadarko. Sources said Chevron could make a deal for Anadarko at approximately $83 per share in cash and stock.

A few weeks later, Bloomberg reported that Anadarko approached Apache Corporation APA 2.12% "about a combination that would be the largest for an independent U.S. oil and gas producer this year."

Calls and emails to China Petroleum and Anadarko were not immediately returned.
Jason Shubnell, Nick Donato and Garrett Cook contributed to this report.

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