Brazil Oil Junior 3R Agrees to Buy Enauta for About $1.2B

3R Petroleum Oleo e Gas SA agreed to acquire Enauta Participacoes SA in an all-stock deal, the latest move in a wider consolidation of Brazil’s oil industry.

Enauta holders will get 0.8092 share of 3R Petroleum for each of their shares in the transaction, according to a filing Friday. Based on Enauta’s shares outstanding and 3R’s closing price Thursday, the deal is valued at about $1.2 billion. 3R will hold 53% of the new company, while Enauta’s shareholders will account for the remaining 47%. 

3R shares rose as much as 3.8% in early trading Friday. Enauta climbed as much as 1.7%.

Once the merger is concluded, Enauta will become a subsidiary of 3R, and its shares will no longer be traded in the local stock market.  The deal is subject to approval by both company’s shareholders and Brazilian regulators. 

The news comes after both companies signed a memorandum of understanding in April to create a single, larger entity. 3R was already considering a potential combination with PetroReconcavo SA, another Brazilian oil producer.