PE firm Apollo Global to buy E&P of El Paso for $7.15 billion
25 Feb 2012
A consortium led by private equity firm Apollo Global Management yesterday agreed to buy the exploration and production unit (E&P) of El Paso Corp. for $7.15 billion – this year's second-biggest private equity takeover of an oil and gas company.
The sale is subject to the closing of Houston-based pipeline company Kinder Morgan's proposed $20.7 billion acquisition of El Paso. (See: Kinder Morgan may acquire El Paso for $21.1 bn, create $94-bn business)
Bloomberg had reported last month that Reliance Industries, which has acquired shale gas assets in the US, is among other companies in talks to buy El Paso's E&P business.
Kinder Morgan plans to use most of the proceeds of the sale to pay down debt it has taken on to fund the El Paso acquisition.
The business is being acquired by Apollo Global, which is joined by New York-based energy and power industries investor Riverstone Holdings and Access Industries, both companies founded by Russian-born Len Blavatnik.
El Paso's assets are located in the Niobrara field in Colorado and the Eagle Ford and Wolfcamp fields in Texas, which produce oil and natural gas liquids such as propane and butane.
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