#AbuDhabi’s IHC weighs bid for Lukoil’s international assets

Abu Dhabi’s IHC weighs bid for Lukoil’s international assets

International Holding Company, the vast Abu Dhabi conglomerate, is weighing a bid for Lukoil’s overseas assets, after US sanctions forced the Russian energy giant to find a buyer for its international network of refineries, pipelines and oilfields.

As Lukoil races to dispose of its overseas assets, a range of groups including private equity firm Carlyle, oil major Chevron, and now IHC are examining whether to bid for all or part of the assets, which have a book value of roughly $22bn.

IHC, which is chaired by Sheikh Tahnoon bin Zayed al-Nahyan, one of the United Arab Emirates’ most powerful royals, has been expanding aggressively — and aims to double its $125bn asset base over the next five years.

IHC said: “We are looking at Lukoil’s foreign assets, and we are talking to the [US] Office of Foreign Assets Control.” IHC’s interest was first reported by Reuters. Carlyle and Chevron declined to comment.

The move by IHC tees up a potential contest over the assets between UAE and Washington-based Carlyle, an investor with about $470bn under management.

The US Department of Justice has given dispensation for companies to negotiate with Lukoil until December 13. Any potential deal would require US regulatory approval.

US energy company Chevron is also examining a bid for part of Lukoil’s assets, said people familiar with the matter. Lukoil owns 5 per cent of the Tengiz oilfield in Kazakhstan, which is operated by Chevron and in which the US major has a 50 per cent stake.

Lukoil said this week that it was in negotiations with “several potential buyers” about the asset sale. It would prefer a buyer who would be able to purchase all of its assets, according to people familiar with the process.

Potentially complicating the sales process, Lukoil’s sprawling portfolio includes several minority stakes in energy projects that contain a legal “right of first refusal” that allows existing co-owners to buy into the project, in the event of a change of control.

Lukoil had earlier agreed a deal to sell its entire portfolio to Gunvor, but the Swiss trading house withdrew its offer after the US government opposed the deal.

The Treasury earlier this month said it would not grant a licence for Gunvor to operate Lukoil’s assets and described the trading firm, which has sought to distance itself from Russia, as the “Kremlin’s puppet”.

Gunvor was co-founded by a close ally of Russian President Vladimir Putin, Gennady Timchenko, who left the company 11 years ago and who no longer holds a stake.

ADNOC's Covestro takeover gets final regulatory approval in Germany | Reuters

ADNOC's Covestro takeover gets final regulatory approval in Germany | Reuters

Abu Dhabi state oil firm ADNOC and Germany's Covestro (1COVG.DE), opens new tab have received the final outstanding regulatory approval from the German economy ministry for their 14.7 billion euro ($16.9 billion) takeover deal, the chemicals company said on Friday.

Covestro said all closing conditions for the takeover by ADNOC were fulfilled, and that the transaction was expected to close in the coming days.

Last week, the companies received the EU's conditional approval of the deal after the Commission restarted its investigation into the deal following EU concerns that ADNOC might be using state subsidies to acquire Covestro.

Covestro said that, upon closing of the deal, the company would proceed with a 1.17 billion euro capital increase for strategic investment and further execution of its sustainability programme.

Covestro shares were up 0.66% as of 1358 GMT.

#UAE shares decline on weak oil and rate cut uncertainty | Reuters

UAE shares decline on weak oil and rate cut uncertainty | Reuters

Stock markets in the United Arab Emirates fell on Friday tracking weaker oil prices as the United States pressed for a Russia-Ukraine peace deal that could boost global supply while stronger than expected U.S. jobs data fuelled uncertainty over interest rates.

Ukrainian President Volodymyr Zelenskiy said he would work with Washington on a plan to end the war.

Data showed the U.S. economy added far more jobs than expected in September, but a rise in the unemployment rate and downward revisions to prior months painted an ambiguous picture for the Federal Reserve as it considers whether or not to cut interest rates next month.

Brent crude was down 1.9% to $62.16 a barrel by 1115 GMT.

Dubai's benchmark index (.DFMGI), opens new tab slid 1.3%, its sharpest intraday decline in nearly two months, with the broader market firmly in negative territory.

Emirates NBD Bank (ENBD.DU), opens new tab, Dubai's largest lender, sank 4.7%, while road-toll operator Salik Company (SALIK.DU), opens new tab also weighed on the market with a 2% decline.

Abu Dhabi's benchmark index (.FTFADGI), opens new tab dropped 0.9%, settling near its 5-month low as top lenders Abu Dhabi Commercial Bank (ADCB.AD), opens new tab And First Abu Dhabi Bank (FAB.AD), opens new tab tumbled 2.4% and 2.3% respectively.

However, Abu Dhabi conglomerate International Holding Company (IHC.AD), opens new tab edged 0.2% higher following a report that the firm had expressed interest in Russian oil group Lukoil's (LKOH.MM), opens new tab foreign assets to the U.S. Treasury, the company said in response to a Reuters enquiry.

Separately, The United Arab Emirates said on Friday it will invest up to $50 billion in Canada under a framework that includes projects in artificial intelligence, energy, and mining sectors.

Dubai's index posted weekly loss of 1.9%, its steepest decline in two-months, while Abu Dhabi's benchmark fell 1.2% over the week, according to data compiled by LSEG.