Carlyle's Mediterranean Deal Is in Jeopardy
The highly anticipated $945 million acquisition deal between Carlyle and Energean is reportedly facing serious obstacles. According to statements from Energean and industry insiders, Carlyle’s offer is encountering unresolved regulatory hurdles in Egypt and Italy. Energean has confirmed that specific approvals in these countries are still pending. The situation jeopardizes the entire deal, as the deadline for its completion is this week, and no extension has been agreed upon so far.
In June 2024, Carlyle reached an agreement with Energean to acquire its assets in Croatia, Egypt, and Italy. The acquisition is a key component of Carlyle’s plan to establish a Mediterranean-focused oil and gas company, to be led by former BP CEO Tony Hayward. However, analysts warn that the lack of regulatory progress could lead to a complete breakdown of the deal. Energean has already stated that without an extension, the agreement could be terminated, with the final deadline set for March 2025.
Energean reiterated today that, according to the Sale and Purchase Agreement signed on June 19, 2024, and announced in August 2024, the transaction’s completion is subject to regulatory approvals in Italy and Egypt, along with antitrust approvals in Italy, Egypt, and the Common Market for Eastern and Southern Africa (COMESA). These approvals are essential for the deal to proceed, and the lack of progress in securing them remains a major hurdle. Energean also confirmed that it has not reached an agreement with Carlyle to extend the longstop date.
Related: Petronas in Talks to Exit Argentina’s Vaca Muerta Shale
Despite these uncertainties, Energean CEO Mathios Rigas has emphasized that the company remains committed to the deal with Carlyle. He stated that, despite the challenges, Energean is determined to see the transaction through. However, Carlyle has yet to respond, and the pressure is mounting.
For Carlyle, acquiring Energean’s assets is crucial to its strategy of creating a new Mediterranean-focused energy company. In June 2024, Carlyle outlined its plan to expand into the Eastern Mediterranean gas market, particularly targeting Egypt and European gas demand. According to Carlyle International Energy Partners (CIEP)—Carlyle’s non-U.S. energy investment arm—the new company is expected to produce up to 47,000 barrels of oil per day across the three countries. CIEP’s Bob Maguire also stated that additional acquisitions are planned in the future. If the deal goes through, Carlyle could significantly expand its presence in the Mediterranean energy market, potentially securing substantial profits.
If the deal collapses, it will have major implications for Energean’s strategic direction. Currently, Energean primarily produces offshore natural gas in Israel but has been working to diversify its portfolio by focusing on assets in Europe, the Middle East, and Africa. CEO Rigas has highlighted the significance of the Carlyle deal, calling it both strategic and highly profitable. He stated in June 2024, “It’s a great deal for us; we’re selling assets at three times the price we bought them.”
Under the original agreement, Carlyle was set to make a cash payment of $504 million, after which Energean planned to pay a $200 million special dividend and fully repay a $450 million corporate bond. A potential breakdown of the deal could seriously impact Energean’s future growth strategy.
By Cyril Widdershoven for Oilprice.com
More Top Reads From Oilprice.com