Comprehensive M&A data with integrated detailed company information

Blackstone and Apollo interested in Occidental’s Western Midstream: Bloomberg
Posted on Friday, 20 September 2019 07:18
Private equity firms Blackstone and Apollo Global Management are interested in making an offer for a majority stake in Western Midstream Partners, which is being sold by Occidental Petroleum to reduce its debt, people close to the matter told Bloomberg.

Shares in the potential target closed up slightly to USD 27.05 following the report yesterday, giving the business a market capitalisation of USD 12.25 billion.

According to the sources, Global Infrastructure Partners and KKR & Co are also interested in bidding, with a deal likely to be reached by the end of the year.

Buyout group Apollo is expected to table an offer via its Spartan Energy Acquisition oil and gas vehicle, the insiders noted, asking not to be identified as the situation is still private.

The people also cautioned that a deal is yet to be agreed and Occidental could decide to keep the company, which it gained earlier this year through its USD 57.00 billion purchase of Anadarko Petroleum.

After finalising the largest oil and gas acquisition announced globally in 2019 to date, according to Zephyr, the M&A database published by Bureau van Dijk, the buyer said it will pursue asset sales in a bid to reduce debt.

Occidental has outlined plans for between USD 10.00 billion and USD 15.00 billion worth of disposals to dilute obligations, which quadrupled to USD 40.00 billion as a result of the purchase.

Banking and merger specialists told Reuters back in May the most likely divestments are expected to be the offshore assets in the Gulf of Mexico and its pipeline business.

Western Midstream is a growth-orientated master limited partnership that owns, acquires, develops and operates midstream energy assets in the Rocky Mountains, North-central Pennsylvania and Texas.

It has over 15,200 miles of oil and gas pipelines and around 72 processing and treatment facilities.

During the six months to 30th June 2019, Western Midstream recorded revenue of USD 1.36 billion, a 33.3 per cent increase from USD 1.02 billion in the corresponding period of 2018.

Adjusted earnings before interest, taxes, depreciation and amortisation rose 38.2 per cent to USD 861.25 million in H1 2019 (H1 2018: USD 623.28 million).

Zephyr shows the acquisition of Anadarko by Occidental is the fifth largest deal on record for the global oil and gas sector.

© Zephus Ltd