Renewable natural gas producer Archaea Energy announced on 17 October it had agreed to be acquired by oil giant bp for a total enterprise value of about "$4.1 billion", including about $800 million in net debt.
bp said the move will expand and accelerate the growth of its strategic bioenergy business.
Bioenergy is one of five strategic transition growth engines that bp intends to grow rapidly through this decade. bp expects investment into its transition growth businesses to reach more than 40% of its total annual capital expenditure by 2025, aiming to grow this to around 50% by 2030.
Acquiring Archaea will expand bp’s presence in the US biogas industry, enhancing its ability to support customers’ decarbonization goals and also progressing its aim to reduce the average carbon intensity of the energy products it sells. bp aims to reduce that carbon intensity to net zero by 2050 or sooner.
Bernard Looney, CEO of bp, said: "bp has just signed a $4 billion deal to buy Archaea Energy – a leading US biogas company that produces renewable natural gas. As I've said recently – 'putting our money where our mouth is.'"I realise renewable natural gas might not mean much to people outside the industry so let me explain... it's gas from organic waste – homes, cities and farms – that is captured instead of vented into the atmosphere or flared. That gas can then be processed and used for power or transport. A double win for the environment. "It’s a big deal for our company – accelerating growth in bioenergy – one of our 5 transition growth engines. And it’s a compelling combination of Archaea’s fantastic, fast-growing business and bp’s trading expertise and global customer base – so we’re creating a real biogas leader. "Plus, it’s another great example of bp doing what we said we would – investing with discipline into the energy transition and supporting our net zero ambition. It’s exactly what our transformation into an integrated energy company is all about. "So this is a great move – for bp, Archaea, our customers, and our investors. A big thank you to everyone involved – and we look forward to welcoming the brilliant Archaea team."
bp to buy Archaea Energy for “$4.1bn”
