ONGC to buy HPCL stake

India’s ONGC has agreed to buy the government’s stake in refiner Hindustan Petroleum Corporation (HPCL), the NOC announced over the weekend.

Shares in ONGC rose about 6.3% on Monday following news of the deal, Reuters reported.

“[The] ONGC Board on 19th January, 2018 considered the proposal and approved acquisition of the entire 51.11% shareholding (778,845,375 equity shares) of the President of India, at a cash purchase consideration of INR 473.97 [USD 7.41] per share with a total acquisition cost of Rs. 36,915 Crore [USD 5.78 billion],” ONGC said in a statement.

“ONGC has entered into a share purchase agreement with the President for acquiring the 778,845,375 equity shares of HPCL (representing 51.11% of HPCL) on 20th January 2018. The parties expect to complete the transaction before end of January 2018.”

The merger between the two companies, designed to create a vertically integrated oil major, has been in the works since early 2017.