Rosneft-Led Group Buys India’S Essar Oil for $13 Billion (Download PDF)


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Russian group led energy giant Rosneft Oil Company has agreed to acquire India’s private oil firm Essar Oil in an all-cash deal about US $13 billion. Essar Oil is the India’s Second largest firm.

Logo of Rosneft and Essar

Logo of Rosneft and Essar

Logo of Rosneft and Essar

  • The group includes:

    • Rosneft Oil Company
    • Netherlands-based commodities trader Trafigura
    • Private investment group United Capital Partners
  • Deal was announced in the 8th BRICS Summit in Goa in the presence of Prime Minister Narendra Modi and Russian President Vladimir Putin.
  • Deal proves the desirability of the Indian energy market to foreign investors as one of the fastest developing fuel consuming economies in the world.

Key Aspects of Deal:

  • Rosneft bought a 49 percent stake in Essar Oil’s refinery, port, and petrol pumps while United Capital Partners and Trafigura Group Pte divided 49 percent equity equally.
  • Remaining 2 per cent is held by minority shareholders after delisting of Essar Oil.
  • $2 Billion ( Rs. 13,300) crore will be paid for the acquisition of Vadinar Port which has excellent storage and import/export facilities.
  • Deal includes Essar Oil’s debt of $4.5 billion and about $2billion in debts for Port Company and power plant.

Importance of the Deal

  • Largest foreign acquisition in India.
  • Single largest foreign investment in the Indian refining sector.
  • Russia’s biggest outbound or foreign acquisition deal.
  • Rosneft thus became one of the 4 international players in Indian fuel retailing market- Royal Dutch, Shell, British Petroleum (Deal announced yesterday).

About Essar Group

  • Indian conglomerate founded by Shashi Ruia and Ravi Ruia.
  • Number of excellent assets diversified in the basic sectors of energy, metals, mining, infrastructure, and services.
  • Strategic position in refining, infrastructure assets, and global oil market.
  • Extended its global outline and is focusing on Asia, Europe, Africa, and the Americas market.
  • Founded: 1969
  • Headquarters: Mumbai, Maharashtra, India
  • Product:

    • Steel
    • Oil and Gas
    • Electricity
    • Infrastructure
    • Shipping
    • Information technology
    • Retail and Real Estate

About Rosneft

  • An integrated oil company with majority stake owned by the Government of Russia.
  • Largest publicly traded Oil Company since March 2013 (after buying TNK-BP).
  • Headquarters: Moscow, Russia
  • Founded: 1993
  • Products:

    • Petroleum
    • Natural Gas
    • Motor Fuels
    • Petrochemicals

- Published/Last Modified on: October 16, 2016


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