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Private equity–oil and gas M&A


A leader in European oil and gas is born

It was boom time for financial sponsors as Neptune Energy Group stepped up to acquire a majority stake in ENGIE E&P International (EPI), the French utility’s upstream oil and gas division.

With huge quantities of dry powder, private equity firms were searching for new opportunities, resulting in them increasingly targeting intricate carve-outs and venturing into asset classes previously deemed too complex.

This dynamic was evident when in May 2017 Neptune – an investment platform led by former Centrica CEO Sam Laidlaw and backed by funds advised by affiliates of Carlyle and CVC – agreed a €4.7bn deal to acquire 70 per cent of EPI.

Restructuring a joint venture

EPI was a joint venture split 70/30 between ENGIE and China Investment Corporation, with assets in more than 15 jurisdictions across Europe, North Africa and south-east Asia.

The transaction required the carve-out of a standalone business to meet Neptune’s investment needs and a restructuring of the joint venture.

The regulatory challenge

The broad portfolio, lengthy period to completion and energy market dynamics created further complexities.

ENGIE is retaining an interest in an onshore gas field in Algeria, requiring a separate governance structure. We helped to develop a series of operational earn-outs, vendor financing arrangements and liquefied natural gas supply arrangements with the wider ENGIE group.

Our advice also helped Neptune and its investors get comfortable with their obligations under a range of sector-specific and environmental regulations across multiple jurisdictions.

Taking Neptune to the top

After the deal closed in early 2018, we helped Neptune co-ordinate the consents and approvals process across the globe.

This work puts Neptune into the top rank of European independent exploration and production companies, and gives it a streamlined platform on which it can build its oil and gas operations.