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Merger and Acquisition

NNPC Acquires Addax Petroleum, Expects More Investments on Assets

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Nigeria’s energy conglomerate, Nigerian National Petroleum Company Limited (NNPCL) has disclosed that it has fulfilled all closing obligations relating to the acquisition and transfer of assets of Addax Petroleum Development Company Limited.

This came as NNPCL promised to ensure that it facilitates investments in Addax assets with a view to boosting the energy economy in the country.

The termination of the relationship between NNPCL and Addax Petroleum Development (Nigeria) Limited is coming after a 24-year Production Sharing Contract (PSC) of operations with the energy conglomerate.

To bring about a seamless kick-off of activities, the NNPCL said it has constituted a special purpose vehicle, Antan Producing Limited with interim management to take over Oil blocs OMLs 123/124 & 126/137, hitherto operated by the concessioned oil firm.

Investors King reports that after both organisations had fulfilled necessary transfer obligations, the NNPCL Group Chief Executive Officer, Mele Kyari, signed the closing documents on behalf of the company, while the outgoing Managing Director of Addax Petroleum, Yonghong Chen, signed for his company at the NNPC headquarters office in Abuja.

It could be recalled that in November 2022, Nigeria’s energy company had signed a settlement and exit agreement with Sinopec’s Addax Petroleum Development (Nigeria) to end its four major oil mining blocks in the country.

To this end, Addax would no longer be the PSC contractor for the OML 123/124 and OMLs 126/137.

A statement issued by NNPCL Chief Corporate Communications Officer, Garba Deen Muhammad, said the closing obligations were done three months after the execution of the Addax Transfer, Settlement, and Exit Agreement (ATSEA) for the PSC Oil blocks.

Muhammed promised that NNPC would fetch more investments on the assets and appoint a competent replacement PSC contractor to manage it.

He added that the NNPC Limited would continue to remain the Concessionaire of the assets in line with extant laws and regulations, adding that exit negotiations and formalities were concluded and that the energy conglomerate in collaboration with the Office of the Attorney General of the Federation, NUPRC, NMDPRA, FIRS, EFCC, and the FCCPC have agreed on the clean and amicable exit for Addax.

The NNPC Communication Officer added that the company would resolve all the PSC contractual issues, including litigations that culminated in the execution of a TSEA on the 1st of November 2022.

He said NNPCL has announced the appointment of the Transition Team lead, Mr. Sagiru Jajere, as the Managing Director of Antan Producing Limited.

Before his appointment, Jaiere was the Head of PSC Investment Management at the NNPC Upstream Investment Management Services (NUIMS).

Jaiere, according to Muhammed, would be aided by a team of highly competent personnel with in-depth knowledge of the peculiarities of the Addax Assets.

NNPCL maintained that much-needed investments would be facilitated to the over-taken Assets.

The company also said it would create value for the PSC and prudently conduct petroleum activities in it.

Merger and Acquisition

Capital One Financial Corp. to Acquire Discover Financial Services in $35 Billion Mega Deal

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Capital One Financial Corp. has announced its intention to acquire Discover Financial Services in a $35 billion deal.

This strategic acquisition positions Capital One as the largest credit card company in the United States by loan volume, intensifying competition with Wall Street’s prominent players.

Under the terms of the agreement, Capital One will purchase Discover at a premium, offering 1.0192 of its own shares for each Discover share—a 26.6% premium based on the closing price on February 16th.

Pending regulatory and shareholder approvals from both entities, the deal is anticipated to conclude in late 2024 or early 2025.

The merger between Capital One and Discover represents the most significant global consolidation this year, surpassing notable acquisitions in various sectors.

By combining forces, Capital One and Discover unite two esteemed consumer-finance brands, effectively eclipsing competitors such as JPMorgan Chase & Co. and Citigroup Inc. in US credit-card loan volume.

This acquisition not only amplifies Capital One’s market share but also grants the company a formidable position within the payment networks sphere.

Capital One’s CEO, Richard Fairbank, described the merger as a “singular opportunity” to establish a robust presence alongside the largest payment networks, underscoring the transformative potential of the deal.

Upon completion, Capital One shareholders will possess approximately 60% ownership of the consolidated entity, with Discover shareholders owning the remaining stake.

The acquisition is expected to yield significant synergies, generating $2.7 billion in pretax benefits.

The strategic rationale behind the acquisition underscores the increasing importance of scale and technological capabilities in the financial sector.

By leveraging Discover’s extensive network and Capital One’s expertise, the combined entity aims to drive innovation and enhance value for customers in an ever-evolving market landscape.

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Merger and Acquisition

Barclays Plc to Acquire Tesco Plc’s Banking Business in £600 Million Deal

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Barclays Plc has announced its acquisition of Tesco Plc’s banking business in a £600 million deal.

The transaction marks Barclays’ endeavor to strengthen its presence in consumer finance and retail banking services across the United Kingdom.

According to the terms of the deal, Barclays will pay approximately £600 million upon the completion of the acquisition.

This includes the acquisition of £4.2 billion worth of credit-card receivables, £4.1 billion in unsecured personal loans, and £6.7 billion in customer deposits from Tesco Bank.

Tesco Plc, in a separate statement, revealed that it anticipates receiving around £1 billion in cash from the sale, considering the release of regulatory capital and an earlier dividend payment by Tesco Bank.

The majority of these funds are slated for a share buyback program, demonstrating Tesco’s strategic financial planning post-sale.

The acquisition, subject to regulatory approvals, is expected to conclude in the latter half of 2024. As part of the agreement, Barclays and Tesco will enter into a 10-year partnership allowing Barclays to utilize the Tesco brand for marketing and distributing credit cards, unsecured personal loans, and deposits.

Barclays’ CEO, C.S. Venkatakrishnan, expressed enthusiasm about the strategic collaboration with the UK’s largest retailer, emphasizing its potential to create new avenues for distributing unsecured lending and deposit products.

While the deal is projected to slightly impact Barclays’ common equity tier 1 ratio, the bank does not anticipate significant alterations in financial returns or shareholder distributions due to the acquisition.

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Merger and Acquisition

Exxon Mobil Corp. to Withdraw from Equatorial Guinea, Ending Decades-Long Oil Presence

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Exxon Mobil Corp., a key player in Equatorial Guinea’s oil sector for almost three decades, has announced its plans to withdraw from the country in the coming months, bringing to an end a significant era in the nation’s oil history.

The decision comes as Exxon Mobil intends to transfer its investments in Equatorial Guinea to the government during the second quarter of the year.

The company explained its commitment to ensuring a safe transition of operations and supporting those affected by the change.

Equatorial Guinea experienced a surge in oil production at the turn of the century, becoming one of the world’s prominent oil provinces following significant discoveries by Mobil Corp. in the mid-1990s. Exxon’s acquisition of Mobil in 1999 further boosted production.

However, over the years, the country’s oil output plummeted by more than 80% due to diminishing reserves and declining foreign investment.

Exxon Mobil’s decision aligns with its long-term strategic objectives, focusing on capitalizing on the most promising opportunities worldwide.

CEO Darren Woods has prioritized investments in regions like Guyana and the US Permian Basin, where growth potential and cost efficiency are more favorable.

The departure underscores the complex dynamics of oil investment, where companies assess risks related to regulatory environments and political stability.

Dr. Ken Medlock of Rice University’s Center for Energy Studies highlighted that escalating risks could prompt companies to seek better opportunities elsewhere.

The exit of Exxon Mobil represents a significant shift for Equatorial Guinea, which has long relied on oil revenue to drive economic growth.

While the country’s oil wealth once bolstered its GDP per capita, challenges remain in addressing social indicators and human rights issues, signaling a transformative period ahead as Equatorial Guinea navigates its post-oil future.

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