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Not the best day for M&A: We have news of two separate cross-border acquisitions from Emirati companies and investors that could fall through.
#1- Abu Dhabi National Oil Company (Adnoc) and UK energy giant BP have paused negotiations on a USD 2 bn major stake purchase in Israel’s NewMed Energy amid “uncertainty created in the external environment,” according to a statement (pdf) from NewMed.
It’s not completely off the table: Adnoc and BP “again expressed interest” in the stake purchase, the Israeli offshore natural gas producer said in the statement, and there is potential for the companies to complete their bid once geopolitical tensions have cooled, Bloomberg cites a person familiar with the matter as saying.
Background: Adnoc and BP agreed to jointly acquire 50% of the Israeli energy company for nearly USD 2 bn back in March 2023. As part of the acquisition, the companies planned to establish a new joint venture targeting gas development in the East Mediterranean, and other international areas of mutual interest.
Adnoc and BP have other plans in the meantime: Earlier in February, the companies agreed to form a joint venture to develop natural gas assets in Egypt. Adnoc will provide funds to support the venture’s expansion, while BP contributes its stakes in three development concessions.The JV is scheduled to go live in 2H 2024.
Reuters and the Financial Times also had the story.
#2- UK closer to blocking RedBird IMI’s GBP 600 mn bid for the Telegraph: British Prime MinisterRishi Sunak has proposed amendments to legislation that would ban foreign state ownership of British newspapers and magazines, effectively blocking the acquisition of Telegraph Media Group by Abu Dhabi-backed RedBird IMI, the Financial Times reports, citing plans outlined by UK Culture Minister Stephen Parkinson in the UK Parliament on Wednesday.
The details: Proposed amendments will see the UK’s competition watchdog, the Competition and Markets Authority, block any transactions involving a foreign state’s influence over a British media group, with state influence stipulated as foreign governments acting in a private capacity and investing their private wealth. The legislation will be voted on in the next reading of a digital markets bill passing through parliament.
RedBird IMI’s take: A spokesperson from RedBird IMI told the FT that it was “extremely disappointed” by the move and is currently evaluating “next steps,” adding that the acquisition is a “fully commercial undertaking.”
REMEMBER- RedBird IMI could be joined by other companies, including Rupert Murdoch’s News Corp and the owner of the Daily Mail, General Trust. This would dilute RedBird IMI’s stake, potentially down to 25%, which could ease UK watchdogs’ concerns over foreign state control of the media outlet, sources said earlier. RedBird IMI is majority owned by deputy prime minister Sheikh Mansour bin Zayed Al Nahyan.
Background: The transaction has been contested in the UK, with 73 British MPs, including a cabinet minister and frontbenchers from both political parties calling to halt the takeover. UK Culture Secretary Lucy Frazer issued an order to prevent any further changes to the ownership of The Telegraph until the UK government completes its investigation into the takeover in February, and will decide on the bid next week after receiving findings from the Competition and Markets Authority on the acquisition.
