2010-05-19-2010-03-22

Transaction Type
Sellers
Buyers
Announce Date
Post Date
Estimated Price
$3,200.0MM
Description

To acquire largest LNG permit holder in Australia.

A company jointly owned by Royal Dutch Shell Plc, The Hague, Netherlands, (NYSE: RDS) and PetroChina Co. Ltd., Beijing, (NYSE: PTR) plans to acquire Arrow Energy Ltd., Brisbane, (Australia: AOE), the largest holder of liquefied natural gas permit holder in Australia, for A$3.5 billion (US$3.2 billion)

CS CSG (Australia) Pty Ltd., a 50/50 joint-venture company owned by Shell Energy Holdings Australia Ltd. and PetroChina International Investment Co. Ltd., will pay A$4.70 (US$4.32) per share of Arrow, which has coal-seam gas and domestic power assets in Queensland, as well as a site for a proposed LNG plant on Curtis Island at Gladstone.

Prior to being acquired, Arrow will spin off its international business into a new company calledDart Energy Ltd., which will consist of Arrow's existing coal-seam gas assets in China, India, Vietnam and Indonesia; Arrow's interests in Apollo Gas Ltd. (21.04%), Bow Energy LNG Ltd. (1.4%) and Liquefied Natural Gas Ltd. (7.5%); and farm-in rights on two licenses in New South Wales, Australia. The new company will also receive a US$25 million loan facility from Shell.

Arrow shareholders will receive one share in Dart for each share in Arrow they own, as well as $4.70 per Arrow share as part of the acquisition.

Arrow says the combined experience, technical capabilities, capital backing and LNG marketing ability offered by Shell and PetroChina will be a game changer for Australia's LNG industry.

Arrow is expected to hold a shareholder meeting in July to allow shareholders to vote on the offer. The acquisition is subject to approval by several Chinese and Australian regulatory agencies.

The acquisition is expected to close in early August.

Citi and UBS are financial advisers and Gilbert & Tobin is legal adviser to Arrow.

Arrow chairman John Reynolds says, "This transaction crystallizes the value of more mature assets that have been built in Arrow's Queensland business through the rigorous execution of our business strategy. In addition, we are creating an exciting opportunity for Arrow Energy shareholders to continue to participate in a portfolio of earlier-stage development assets in Australia and the broader Asian region. That company will be led by the same management team that successfully grew Arrow Energy into a major Australian energy company."