Shell has agreed to buy East Africa-focused Cove Energy in a deal worth £1.12 billion, it has been announced.
London-listed Cove will be acquired by the energy giant’s Shell Bidco subsidiary.
The acquisition marks Shell's entry into Kenya and Mozambique, with potential for new LNG from recent gas discoveries offshore Mozambique. Shell already has interests in Tanzania.
In a statement, Shell said: "The boards of directors of Cove and Shell Bidco are pleased to announce that they have reached agreement on the terms of a recommended cash offer to be made by Shell Bidco for the entire issued and to be issued share capital of Cove.
"East Africa is a major prospective hydrocarbon province, which has seen a significant increase in exploration activity in recent years. Shell already has interests in Tanzania, and the acquisition of Cove would mark Shell's entry into exciting new hydrocarbon provinces in Kenya and Mozambique.”
The deal, worth 220 pence per share, represents a 95.6 per cent premium on Cove's share price in January, when the oil company announced it was putting itself up for sale.
