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US$4.18 billion bid for oil firm accepted
By Wang Ying (China Daily)
Updated: 2005-08-23 06:02

The nation's largest oil and gas producer, China National Petroleum Corp (CNPC), yesterday reached an initial agreement with PetroKazakhstan Inc to buy the Canadian-registered company for US$4.18 billion, topping the bid from an Indian rival.

Tank wagons stand in line next to sulphur stored at Tengiz oil and gas refinery plant in western Kazakhstan in this file photo. PetroKazakhstan Inc, a Canadian oil company operating in central Asia, said on Monday it had agreed to be bought by Chinese energy company CNPC International Ltd for $4.18 billion. [Reuters]
"CNPC, through its wholly owned subsidiary China National Petroleum Corporation International (CNPCI), has participated in acquiring PetroKazakhstan (PK)," the Beijing-based oil giant said in a statement yesterday.

CNPC, the State-owned parent of Hong Kong-listed PetroChina, and PK have entered into an Arrangement Agreement whereby the Chinese oil firm will pay US$55 a share, or 21 per cent more than its closing share price on Friday, PetroKazakhstan said in a statement yesterday.

India's Oil & Natural Gas Corp also bid for the company.

The board of directors of PetroKazakhstan recommended its shareholders accept CNPC's offer and agreed on a US$125 million break-up fee.

The deal is expected to close in October, said the Calgary-based oil company, which produces 7 million tons of crude oil annually.

CNPC is considering a proposal in which PetroKazakhstan shareholders could get discounted shares in a spin-off of its newly formed venture with Hong Kong-listed PetroChina, Newco, PetroKazakhstan said.
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