BP partners with ADNOC to jointly acquire Newmed Energy LP

Newmed Energy LP (TLV: NWMD) is in focus this morning after BP plc (LON: BP) partnered with ADNOC (Abu Dhabi National Oil Co.) to jointly acquire the Israeli energy company for about $2.0 billion.

What’s in it for BP and ADNOC?

The non-binding offer announced today values each share of Newmed Energy at just over 12 shekels – a 72% premium on its previous close.

BP and ADNOC plans on taking the oil and gas company private upon completion of the transaction. According to Yossi Abu – the Chief Executive of Newmed Energy LP:

Offer is the result of a long journey, a long partnership with BP and ADNOC starting with good chemistry and then becoming a more meaningful relationship. This partnership is about the east Mediterranean – Israel, Cyprus, and Egypt.

The acquisition will help BP plc expand its footprint in the said region and ADNOC venture into it for the first time.

Here’s how the acquisition will go about

BP and ADNOC plan on buying about 45% of “NWMD” that’s free floating as well as part of the stake that Delek Group has in the Herzliya-headquartered firm.

Once the deal is closed, the two companies will own 50% of Newmed Energy LP. The press release also reads:

BP and ADNOC intend to form a new joint venture that’ll be focused on gas development in international areas of mutual interest including the east Mediterranean.

According to ADNOC and BP plc that confirmed plans of spending more on oil and gas last month (read more), they’ll explore other options as well to further expand their partnership moving forward. Newmed shares ended more than 35% up today.