Russia approves ONGC bid for Imperial Energy

12 November 2008

ONGC Videsh (OVL), the overseas arm of India's largest oil producer, ONGC, will now make a formal bid for UK's Imperial Energy within the next 28 days, as it met all the necessary requirements for approval of the Russian Federal Anti-Monopoly Service, Russia's anti-trust office.

Petroleum minister, Murli Deora had met Russian prime minister Vladimir Putin last Wednesday to push the deal through but had failed to reach a firm backing for ONGC's acquisition of Imperial Energy. (See: Russian regulators clear ONGC bid for Imperial Energy) 

Russian law requires that any acquisition of a Russian company have to mandatorily meet two preconditions. One requirement is approval on restrictions on ownership of Russian entities by entities controlled by a foreign government,  and the other, anti-monopoly regulations.

The deal was cleared when one regulator approved the ownership of Russian entities by foreign government owned entities while the other removed the last anti-monopoly hurdle by ruling that Imperial Energy was not a strategic asset.

ONGC Videsh has now informed the London Stock Exchange of the developments and is now expected to send documents of the original offer to UK listed Imperial Energy shareholders within 28 days, who in turn have 60 days to decide on the offer.

ONGC, India's biggest oil producer, had, in August, proposed to acquire the London-based Imperial Energy for 1,250 pence a share, valuing it at around $2.6 billion at a time when crude prices was $128 a barrel. Since then prices have plummeted to $57 a barrel as of yesterday.