By Ian McConnell
EDINBURGH-based Capricorn Energy has agreed an all-share “merger of equals” with Tullow Oil, under which the headquarters of the combined group will be in London.
The deal, aimed at creating “a leading African energy company, listed in London”, will see Simon Thomson stand down as chief executive of Capricorn.
He will step down from this post and will chair the “integration steering committee” being established to help with the integration of the two companies.
Mr Thomson has for 11 years been chief executive of Capricorn and its predecessor Cairn Energy, which was founded by former Scottish rugby international Sir Bill Gammell in the late-1980s.
On completion of the combination, Capricorn shareholders will hold approximately 47 per cent of the combined group and Tullow Shareholders around 53%.
Tullow Oil, which is based in London, said of the headquarters plan for the enlarged group: “It is intended that, following completion of the combination, the headquarters of the combined group will be at Tullow's existing offices in London and it is intended that the combined group will also retain premises in Edinburgh and through the application of a flexible work policy enable employees to operate from both premises. The combined group will comply with any obligations to inform and consult with employees and their representatives in respect of these intentions.”
And Tullow Oil highlighted a focus on Africa for the enlarged group.
Laying out the rationale for the deal, it declared: “The boards of Tullow and Capricorn believe the combination has compelling strategic, operational and financial rationale, with the ability to deliver substantial benefits to shareholders, host nations and other stakeholders. The combination represents a unique opportunity to create a leading African energy company, listed in London, with the financial flexibility and human resource capability to access and accelerate near-term organic growth, add new reserves and resources cost-effectively, generate significant future returns for shareholders, and pursue further consolidation.
"The combined group is committed to building a sustainable future through responsible oil and gas development, in close partnership and collaboration with joint venture partners and host governments.”
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