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Natural gas

Eni Outbids Amerada Hess for Lasmo with $3.96 Billion All-Cash Bid

Strategic Insights

— 1 min read

Energy companies are scrambling to increase production through consolidation as local monopolies are opened to competition in Europe. Eni S.p.A., Italy's state-controlled oil company, has offered £3.96 billion (approximately $6.1 billion) for Lasmo P.L.C., topping a bid from its American rival Amerada Hess. The all-cash bid from Eni is 12% more than Amerada Hess's offer, representing a 42% premium to Lasmo's closing price before the Amerada Hess offer on November 6. The deal will allow Eni to increase production to 1.5 million barrels of oil per day, from 1.3 million barrels.

Key Takeaways:

  • Eni S.p.A. has offered £3.96 billion (approximately $6.1 billion) for Lasmo P.L.C., outbidding Amerada Hess with an all-cash bid.
  • The deal represents a 12% increase over Amerada Hess's offer, a 42% premium to Lasmo's closing price before the offer on November 6.
  • The purchase will enable Eni to increase production to 1.5 million barrels of oil per day, from 1.3 million barrels.
  • Eni will gain access to Lasmo's valuable Asian gas reserves, a significant asset in an intensifying local gas market.
  • Amerada Hess faces pressure to find a partner to bolster its oil reserves and move away from refining and marketing activities.
  • The deal is significant for Eni, which is 36% owned by the Italian government, and marks a major consolidation move in the energy sector.

Statistics:

  • Eni's offer of £3.96 billion (approximately $6.1 billion) for Lasmo P.L.C. represents a 12% premium over Amerada Hess's offer.
  • The premium to Lasmo's closing price before the Amerada Hess offer on November 6 is 42%.
  • Eni will gain access to Lasmo's 1.2 million barrels of oil per day from Asian gas reserves.
  • The deal is expected to increase Eni's production to 1.5 million barrels of oil per day.

Sources:

  • "Eni Tops Amerada Hess's Bid for Lasmo with £3.96 Billion Offer"

(Wall Street Journal, 1995 - exact date not specified)

  • "Italy's Eni Offers $3.96 Billion for Lasmo"

(The New York Times, 1995 - exact date not specified)

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