|BEIJING, JUN 25---China Makes $7.22 Billion Offer For Canadian Oil Company
Chinese oil company Sinopec will acquire Canadian oil company Addax for $7.2 billion in order to gain access to Addax's contracts to drill for oil in Africa and Iraq.
This deal will help the company grab more oil for itself, which should save it money. Sinopec currently has to buy 75% of the oil its refines into fuel. In China there's strict price caps on gasoline, so Sinopec is regularly losing money.
Though its parent, the Sinopec Group, is wholly owned by the Chinese government, so we imagine it all ends up a wash anyway.
This is the biggest takeover of a foreign firm in China's history. Sinopec will be paying $46.12 a share, a 16% premium over yesterday's price, and a 47% premium over the closing price on June 5th, when it first came to light that Addax might be acquired.