China’s MOFCOM to Review Merger in Gas Market

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Recently, ENN Energy Holdings Limited and China Petroleum & Chemical Corporation jointly announced the acquisition of all outstanding shares in China Gas Holdings Limited.  This acquisition triggers a requirement to notify and obtain clearance from China’s Ministry of Commerce (MOFCOM).  Therefore, MOFCOM’s approval will be one of the preconditions for ENN Energy and Sinopec to close the transaction. 

On 13 December 2011, ENN Energy Holdings Limited (ENN Energy) and China Petroleum & Chemical Corporation (Sinopec) jointly announced the acquisition of all outstanding shares in China Gas Holdings Limited (China Gas) for HK$16.7 billion (approximately RMB 13.6 billion or US$2.1 billion), adding that this acquisition triggers a requirement to notify and obtain clearance from China’s Ministry of Commerce (MOFCOM).  Clearance from MOFCOM would therefore be one of the preconditions for ENN Energy and Sinopec to close the transaction.  

According to the offer announcement ENN Energy made, the acquisition will enhance the market position and geographical coverage of ENN Energy.  As of 30 June 2011, ENN Energy had 100 piped gas projects in 15 provinces, autonomous regions and directly administered cities in the People’s Republic of China (PRC).  As of 30 September 2011, China Gas operated 151 city piped gas projects, nine long distance natural gas pipeline projects, 112 compressed natural gas refilling stations for vehicles, one natural gas development project and 44 liquefied petroleum gas distribution projects in 20 provinces, autonomous regions and directly administered cities in the PRC.

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Published In: Administrative Agency Updates, Business Organization Updates, Energy & Utilities Updates, International Trade Updates, Mergers & Acquisitions Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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