Buying Russian oil
25 Apr 2003
Marathon Oil Corporation is to acquire the Russian-based Khanty Mansiysk Oil Corporation (KMOC) in a $275 million cash merger transaction.
The aggregate purchase price of £275 million includes Marathon's assumption of all of KMOC's outstanding debt obligations, redemption of KMOC's outstanding preferred stock and cancellation of KMOC's outstanding derivative securities.
Under the terms of the deal, a wholly owned Marathon subsidiary will be merged with and into KMOC, with KMOC continuing as the surviving corporation and a wholly owned subsidiary of Marathon.
The transaction is subject to the approval of KMOC stockholders. Between them, Enterprise Oil Overseas Holdings and Enterprise Oil Exploration (both members of the Royal Dutch/Shell group of companies) own approximately 45% of the outstanding KMOC common stock and, under a stockholder agreement with KMOC, have until May 6, 2003, to either make a matching offer for the common stock they do not own or approve the transaction.
Currently, a majority of non-Enterprise stockholders have committed to approve the transaction. Subject to the satisfaction of this and other closing conditions, the transaction is expected to close no later than May 13.