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Msg  139309 of 140599  at  10/18/2022 6:16:37 AM  by

MikeyHorse


BP to Buy Archaea Energy. The Renewable Natural Gas Stock Is Soaring.

 

Author: Palumbo, Angela

Barron's (Online) ; New York (Oct 17, 2022).

 
 

Archaea Energy shares soared Monday after announcing it would be acquired by British oil giant BP for $4.1 billion.

BP (ticker: BP) will pay $3.3 billion in cash, or $26 per share, for renewable natural gas company Archaea (LFG), as well as around $800 million for the company's debt, according to a news release . That's a 38% premium to Archaea's volume weighted average share price for the 30 days ending Oct. 14, the companies said.

The deal is subject to regulatory and shareholder approvals, and both companies hope the deal will close by the end of this year.

Upon completion of the transaction, Archaea will operate as a subsidiary within BP, according to a joint news release .

"This deal accelerates our ability to deliver cleaner energy, generate significant earnings in a fast-growing sector and help reduce emissions. This could help bp take a significant stride toward our net zero ambition," Dave Lawler, chairman and president of BP America, said in the news release.

Shares of Archaea Energy surged 52% in premarket trading Monday to $25.73. BP's American depositary receipts were 1% higher.

Archaea went public through a merger with a special purpose acquisition company, or SPAC, in September 2021 . Coming into Monday trading, the stock had fallen 7.7% in 2022 and 5.3% in the past 12 months.

Write to Angela Palumbo at angela.palumbo@dowjones.com

BP to Buy Archaea Energy. The Renewable Natural Gas Stock Is Soaring.

Credit: By Angela Palumbo



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