Russia’s state-controlled oil giant Rosneft, Netherlands based Trafigura Group and Russian investment fund United Capital Partners bought India’s second biggest private oil firm – Essar Oil – in an all-cash deal valued at around $13 billion. The deal is expected to close in first quarter of 2017.
Rosneft bought a 49 per cent stake in Essar Oil’s refinery, port and petrol pumps, while another 49 percent was split equally between Netherlands based Trafigura Group and Russian investment fund United Capital Partners. Remaining 2 percent will be held by minority shareholders after de-listing of Essar Oil. Trafigura, which has been funded by Russian bank, may sell its stake to Rosneft at a later date.
The acquisition is also the biggest in India and largest outbound deal for Russia. The deal was announced as Prime Minister Narendra Modi met Russian President Vladimir Putin during a meeting of the leaders of the BRICS countries (Brazil, Russia, India, China and South Africa).
About Essar Oil
Essar Oil is an India-based company engaged in the exploration and production of oil and natural gas, refining of crude oil, and marketing of petroleum products. It is a part of the Essar Group based in Mumbai. It operates a major refinery in Vadinar, Gujarat, India.
Its 2015 revenue was ₹92,983 crores ($13.79bn) and profit after tax (PAT) during the same period was ₹1,52Crore ($22.54m).
About United Capital Partners
United Capital Partners (UCP) is an independent, private investment group established in 2006 to manage the assets of its partners and co-investors. UCP invests in high-potential private companies and in liquid securities traded on domestic and international markets.
UCP invests in diverse industries including consumer goods, retail, financial infrastructure and services, internet technologies, high-tech materials production, heavy machinery, oil & gas and petrochemicals.”
According to Forbes, total assets of UCP was $ 3.5 billion as of August 2013.
Trafigura is a Dutch multinational commodity trading company founded in 1993 that trades in base metals and energy, including oil. It is the world’s third largest private oil and metals trader following Vitol and Glencore.
As of 2014 it had 5,326 employees with a revenue of $127.6bn of which $2.2bn was net income.
Rosneft is an integrated oil company majority of which is owned by the Government of Russia. Rosneft is headquartered in Moscow. It became Russia’s leading extraction and refinement company after purchasing assets of former oil giant Yukos at state-run auctions.
Rosneft was established in 1993 as a unitary enterprise with assets previously held by Rosneftegaz (the successor to the Soviet Union’s Ministry of Oil and Gas). About 75.16% of Rosneft is owned by the Russian state, while BP owns a 19.75% stake and around 5% of the shares are floated freely.
As of 2015 it had a revenue of $86.9bn and a net income of $5.61bn.