China's Sinopec to acquire Addax Petroleum

Canadian oil and gas exploration company Addax Petroleum Corp has reached a deal to be acquired by Chinese refiner Sinopec.

The Calgary, Alberta-based company, which previously disclosed it was in sale talks, said today all its outstanding common shares will be acquired by Sinopec in a deal worth 8.27 billion Canadian dollars ($7.2 billion).

The wholly-owned subsidiary of China Petrochemical Corp will pay 52.80 Canadian dollars ($46.17) per share.

The takeover is the latest effort by Chinese energy and resource companies to expand and diversify overseas assets as Beijing seeks to secure scarce resources for the country's future growth.

Addax said its board has unanimously approved the deal, which is subject to regulatory approval.

Beijing-based Sinopec, which is formally known as China Petroleum & Chemical Corp, is the country's biggest refiner by capacity.

It urgently needs to expand its upstream international assets to help cushion against spikes in global crude oil prices that have caused it to post billions of dollars in losses in recent years due to caps on domestic fuel prices.

Addax's oil and gas exploration and production are based mainly in west Africa and the Middle East, including joint operation of the Taq Taq field in Iraq's self-ruled Kurdish region with Turkey's Genel Enerji.