Repsol Agrees $8.3B Takeover Offer for Talisman
Repsol announced Tuesday that it has agreed an $8.3-billion takeover of Canada's Talisman Energy that the Spanish company said would transform it into "one of the largest energy groups worldwide". Repsol said the deal has been unanimously approved and recommended by both companies' boards.
Repsol's rationale for the takeover is that it will increase its presence in politically-stable OECD countries while reinforcing its upstream business. The firm believes Talisman will contribute "first class producing and exploration assets" in North America, South East Asia, Colombia and Norway. The deal will see Repsol increase its production by 76 percent to 680,000 barrels of oil equivalent per day and will boost its reserves by 55 percent to more than 2.3 billion barrels of oil equivalent.
Repsol also said that the acquisition will be financed mainly with cash obtained from the recovery of value from the expropriation by the Argentine government of YPF. Argentina agreed in February to pay more than $5 billion compensation to Repsol before the Spanish firm exited its involvement in YPF completely in May with a $1.3-billion sale of its stake in the business.
Repsol CEO Josu Jon Imaz commented in a company statement:
"The agreement with Talisman is the result of an exhaustive analysis of more than 100 companies and assets worldwide. In every area, Talisman has always been the best option, because of the excellent quality of its complementary global assets, including its talent. With Repsol's ability to support growth of these assets there is much value to be realized - it is a win-win situation and will transform Repsol."
Talisman Energy Chairman Chuck Williamson added:
"The deal underscores Repsol's belief in the strong set of assets Talisman has worked hard to develop. Repsol is a world-class operator with a solid track record and the resources to continue the development of these assets within their international portfolio."
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