Sinopec seeks capacity with big bid for Addax
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AP
Oluşturulma Tarihi: Haziran 26, 2009 00:00
SHANGHAI - Sinopec, with its $7.2 billion bid for Addax Petroleum, is seeking crucial production capacity and coveted reserves in West Africa and the Middle East to help balance its heavy reliance on crude oil processing.
News that Addax's board had approved the offer by Sinopec, formally known as China Petroleum & Chemical Corp., helped push the Beijing-based company's shares up more than 2 percent Thursday, though they later fell back to close just 0.4 percent higher at 10.56 yuan.
The deal would be the largest ever overseas takeover by a Chinese company, although is only half the size of last year's acquisition by Aluminum Corp. of China, with Alcoa, of a 12 percent stake in global miner Rio Tinto. That deal was worth $14.3 billion.
A takeover would help cushion Sinopec - China's largest refiner by capacity - against spikes in global crude oil prices that have caused it billions in losses in recent years due to caps on domestic fuel prices.
China is aggressively pursuing major acquisitions of scarce resources needed to fuel its fast growing economy, often running into heavy resistance in the host countries of its takeover targets.
Four years ago, China National Offshore Oil Company withdrew an $18.5 billion bid for the Unocal Oil Company because of a backlash in Washington.
The deal would be the largest ever overseas takeover by a Chinese company, although is only half the size of last year's acquisition by Aluminum Corp. of China, with Alcoa, of a 12 percent stake in global miner Rio Tinto. That deal was worth $14.3 billion.
A takeover would help cushion Sinopec - China's largest refiner by capacity - against spikes in global crude oil prices that have caused it billions in losses in recent years due to caps on domestic fuel prices.
China is aggressively pursuing major acquisitions of scarce resources needed to fuel its fast growing economy, often running into heavy resistance in the host countries of its takeover targets.
Four years ago, China National Offshore Oil Company withdrew an $18.5 billion bid for the Unocal Oil Company because of a backlash in Washington.