Enauta has proposed the merger with 3R Petroleum which would create one of the largest and the most diversified independent oil and gas companies in Latin America.
The merger proposal has been approved by Enauta’s board of directors, and according to the company, the combination results in a balanced, five-year high organic growth portfolio with ability to add value in an environment of consolidation and resilience to commodity pricing cycles.
The new company offers substantial advantages at operational, commercial, financial, governance, and risk management levels. Production exceeds 100,000 barrels of oil equivalent, with 2P reserves over 700 million barrels among a highly complementary and diversified portfolio.
Enauta’s combination with 3R will offer growth opportunities in offshore and onshore operations, mitigating operational, geological and regulatory risks.
Given the two companies strategic assets, scale, and synergies, the combined company will have a competitive advantage in leading consolidation and development of new businesses across Latin America.
The transaction is expected to increase the combined company’s shares liquidity and its ADTV (average daily trading volume), leading to a position amongst top listed companies in B3 with potential for expansion to global indexes. The transaction leverages potential for rapid repricing of securities, surpassing the sum of the current individual market values of the two companies, according to Enauta and 3R.
Enauta proposes to exchange shares, optimizing the transaction, with a simplified structure and execution, eliminating the need for any carve-outs, waiver fees, or restructuring in corporate guarantees. This proposal is subject to due diligence completion during an exclusivity period of up to 30 days.
The transaction is also subject to customary precedent conditions and any other conditions agreed by the companies, including satisfactory negotiation of definitive transaction documents, which should include customary terms and conditions, transaction approval by shareholders of both companies at respective extraordinary general meetings, and legal and regulatory approvals, including approval from Brazil’s Administrative Council for Economic Defense – CADE.
“An Enauta and 3R merger presents a superior transaction compared to that proposed by Maha in a public letter to 3R’s shareholders, in terms of strategic positioning, governance, tangible synergies and from a risk management perspective.
“Results will be promptly and objectively shared across shareholders of both companies, without hindering a future pursuit of operational synergies identified by Maha in optimizations with PetroRecôncavo and with other operators, in a model that minimize inefficiencies,” said Enauta.
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