BlackRock and KKR & Co are close to closing a deal to sell their multibillion-dollar stake in the oil pipeline network of the Abu Dhabi National Oil Company (ADNOC) to Abu Dhabi Holding Company -ADQ, according to Bloomberg. Citing sources.
The sources said the private equity firms are set to give up their combined 40% stake in ADNOC’s oil pipelines to ADQ, early this week. The deal was valued at more than $4 billion, including debt.
BlackRock and KKR bought the stake in ADNOC Oil Pipelines four years ago in what was the first investment by foreign asset managers into the infrastructure of a state-owned oil producer in the Middle East.
ADNOC also reduced its stake in ADNOC Oil Pipelines to about 51% later in 2019 after selling its shares to Abu Dhabi Retirement Pensions and Benefits Fund and Singapore’s Sovereign Wealth Fund “GIC Pte”. According to a statement issued that year, ADNOC Oil has leased 18 pipelines and the state oil company of Abu Dhabi continues to manage the pipelines.
Any deal would add to a flurry of potential deals by Abu Dhabi. Bloomberg reported this month that ADNOC and Austria’s OMV are exploring a combination of Borouge Plc and Borealis AG to create a chemicals and plastics company worth more than $30 billion. The energy group is also seeking to acquire Covestro AG, a German polymer production company, at a value of $12 billion.
ADNOC plans to invest $150 billion to expand production capacity for crude oil, natural gas and chemicals. As well as investing in low-carbon energy production.
Established in 2018, ADQ is Abu Dhabi’s newest wealth fund. and one of the 20 largest sovereign funds in the world with assets worth about $157 billion, according to data provider Global SWF.
The company acts as a holding company for many of the emirate’s strategic assets, including Etihad Airways, as well as the airport and stock exchange operator in Abu Dhabi. It invested in the LuLu Hypermarket Group in the Middle East and became more active abroad, buying a stake in the Louis Dreyfus agricultural company and stepping up its investments in Egypt.