Chinese, Mid East giants in talks to buy stake in Frac Tech for $2.2 bn: report
15 Dec 2011
Middle East oil giant Saudi Aramco and China's state-owned energy firms Sinopec and Cnooc are in talks to acquire up to a 30-per cent stake in North American oil and gas services company Frac Tech International, in a deal that may be worth about $2.2 billion, Reuters yesterday reported, citing two sources with knowledge of the matter.
Fort Worth, Texas-based Frac Tech Holdings, which provides and operates pressure-pumping equipment for the US oil-and-gas industry, is planning to sell around 30 per cent of itself for around $2.2 billion ahead of a planned public share sale next year targeted to raise $1.15 billion, said the news agency.
Frac Tech, in which, Singapore's sovereign wealth fund Temasek holds a 40-per cent stake and Chesapeake Energy holds 30 per cent, is looking to sell 20 to 30 per cent of itself.
According to the report Frac Tech may either sell itself whole to to any one party or allow itself to be carved.
Reuters quoted its sources saying that Frac Tech had also been in advanced talks with Saudi Aramco, Spain's Repsol-YPF SA and Sinopec to establish three separate fracking joint ventures in the Middle East, Argentina and China.
Frac Tech has hired Bank of America, Citigroup and Credit Suisse and Goldman Sachs to underwrite the IPO, which is slated for the second half of 2012.
The proposed joint ventures with Frac Tech would give Aramco, Sinopec and Cnooc access to the fracking technology, which has recently developed rapidly in the US.
Frac Tech is the fourth-largest oil and gas services company in the US after Halliburton, Schlumberger and Baker Hughes.