ENN Group to acquire stake in Santos

ENN Ecological Holdings Co., Ltd, a subsidiary of the ENN Group, will acquire Hony Capital’s 11.7% share in Santos for US$ 750 million to become the largest shareholder in the Australian energy company. The two companies also agreed that Hony Capital will become a strategic investor of ENN ’s A-share listed company through a private placement of new shares, equivalent to US$ 380 million, supporting ENN’s natural gas growth plans.

Mr. Wang Yusuo, Chairman of the ENN Group, said: “The proposed acquisition is an exciting move for ENN. This introduction to the Upstream sector takes us a step forward in our aim to generate value across the entire natural gas value chain, and allows us to learn and build experience.

“Equally importantly, we are gaining a strategic investor and partner in Hony Capital whose deep China experience and global outlook can help us accelerate future growth overseas.”

ENN is also building China’s first private LNG receiving terminal in Zhoushan, Zhejiang Province, to receive imported natural gas. It will have an annual capacity of 3 million tons when Phase 1 is completed in 2018, with scope for further expansion.

The ENN Group is also a long term investor in innovative and sustainable energy solutions including solar energy and clean coal chemical technology as well as intelligent and integrated energy systems using the power of the internet.

Hony Capital is a leading M&A focused private equity company with a track record of success in helping Chinese companies expand overseas through strategic cross-border acquisitions and providing long term support for these companies.

Mr. John Zhao, Chairman of Hony Capital, said: “Hony prides itself on taking a long term view and focusing on value creation for the companies in which we invest. We chose to invest in Santos because of its strategic position in Australia and synergies with the rapidly growing China energy market.  Bringing in ENN as a strategic investor will help Santos connect to that opportunity in China, and at the same time we are helping a Chinese company expand internationally. We have confidence in the ENN Chairman and his management team. After becoming a major shareholder in ENN-EC, we will continue to support its national and international growth.”

The deal remains subject to ENN-EC shareholder approval and customary regulatory filings in China.

Key details

• ENN-EC (“600803.SH”), to acquire Hony Capital’s 11.7% share in Santos for US$ 750 million, subject to its shareholder approval.
• Hony Capital to become second largest shareholder in ENN’s A-share listed company through a private placement of new shares, equivalent to US$ 380 million.