(Reuters) – Mexican conglomerate Alfa Sab de CV (ALFAA.MX) and Harbour Energy Ltd have agreed to acquire Canadian oil and gas company Pacific Rubiales Energy Corp (PRE.TO) for $6 billion, including debt, a person familiar with the matter said on Tuesday.
Pacific Rubiales is the largest independent oil and gas producer in Latin America. Its shares have plummeted more than 80 percent since oil prices began to slide last summer.
Alfa, which already owns a 20 percent stake in the company, decided now was the time to act, and on vastly improved terms than when it paid $21 per share last August in a $189.4 million transaction to raise its stake in the company to 17 percent.
Toronto-listed Pacific Rubiales, whose shares also trade in Colombia, suspended trade in its Bogota shares on Tuesday afternoon after the deal was made public.
Alfa and Harbour have agreed to pay around $6 per share for Pacific Rubiales and will each own half of the company, that source said, asking not to be identified because the deal is not yet public. Pacific Rubiales ended trading on Tuesday at $4.83.
Harbour Energy is a joint venture between Asian commodity trader Noble Group Ltd (NOBG.SI) and U.S. private equity firm EIG Global Energy Partners.
Alfa believes the investment, by boosting its oil and gas footprint, will position it to participate more strongly in Mexico’s energy liberalization, the person added.
Representatives for the companies did not immediately respond to requests for comment.
Toronto-Based Pacific Rubiales produces natural gas and crude oil at 90 exploration and production blocks in seven countries; Colombia, Peru, Guatemala, Brazil, Guyana, Papua New Guinea and Belize.
The company is the second-biggest oil producer in Colombia with output of about 145,000 barrels per day. However, it is set to lose about 65,000 barrels per day of that in mid-2016 when its contract to operate state-run Ecopetrol‘s ECO.CN Rubiales field expires.
Alfa, headquartered near Monterrey, Mexico, has businesses in oil and gas, branded foods, aluminum auto components, petrochemicals, information technology and telecommunications services. It has a market capitalization of 164.7 billion Mexican pesos (US$10.6 billion).
Bank of America Corp (BAC.N) advised Pacific Rubiales on the deal.
(Reporting by Greg Roumeliotis and Mike Stone in New York; Editing by Christian Plumb and Ken Wills)
(This story has been edited by Kirk Falconer, editor of peHUB Canada)
Photo courtesy of Reuters/Jose Miguel Gomez