ONGC pushing ahead with Imperial deal
London, January 1, 2009
Indian oil company ONGC said it will proceed with its £1.3 billion ($1.89bn) takeover of UK-listed Imperial Energy, to the relief of Imperial investors who feared ONGC would back out of the high-priced deal.
The state-controlled company's overseas unit, ONGC Videsh, said yesterday that shareholders representing 97 per cent of Imperial Energy had accepted its offer by the Tuesday deadline and that the offer was now unconditional.
ONGC Videsh said it intended to use Imperial Energy as a platform around which to build a wider business in Western Siberia.
The Indian government has charged ONGC and other state-controlled energy companies with securing energy resources to power India's economy, which has been booming in recent years.
However, Imperial investors, bankers and analysts believed ONGC would back out of the deal - which was agreed when crude traded at around $130 a barrel, compared with less than $40 now - if its condition of 90pc acceptance was not met.
State-backed ONGC tried unsuccessfully to delay the bid, and Indian media said the Delhi government wanted ONGC to renegotiate the deal price to reflect the drop in oil prices.
Indian companies have been less successful in buying energy assets overseas than Chinese rivals with the same mission, partly because ONGC has not been able to move decisively enough on deals, which analysts blame on Indian bureaucracy.
ONGC said the offer remained open for other Imperial shareholders to accept and that it planned to apply to have Imperial delisted.