BlackRock, KKR, GIC among suitors eyeing stake in Abu Dhabi National Oil unit: sources

[LONDON] BlackRock Inc, KKR & Co and Italian infrastructure operator Snam SpA are among suitors that made initial bids for a stake in Abu Dhabi National Oil Co's (ADNOC) natural gas pipelines, which could be valued at about US$15 billion, people familiar with the matter said.

They're competing with other bidders including Australian fund manager IFM Investors Pty and Ontario Teachers Pension Plan that submitted first-round offers in recent days, according to the people. Global Infrastructure Partners and Singapore sovereign fund GIC Pte have also expressed initial interest in acquiring a stake in the business, the people said, asking not to be identified because the information is private.

The Abu Dhabi state energy giant is deciding when to set a timeline for the next round of offers, the people said. Travel restrictions have made in-person meetings and due diligence visits more difficult, and other sale processes have been held up as tightening credit markets hampered bidders' access to funding.

Some bidders are expected to team up as they proceed in the bidding, the people said. ADNOC is seeking to sell as much as 49 per cent of the business through a lease structure, according to the people.

No final decisions have been made, and other bidders could still emerge for the assets, the people said. Representatives for ADNOC, BlackRock, KKR, OTPP and Snam declined to comment. Representatives for GIC, GIP and IFM didn't immediately respond to requests for comment.

Abu Dhabi has been opening up the operations of its state-owned oil producer to foreign partners, part of a push to diversify the Gulf emirate's economy and generate additional sources of funding. ADNOC has listed its distribution unit and sold a stake in its US$11 billion drilling business to Baker Hughes Co.

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KKR and BlackRock agreed last year to invest US$4 billion in Adnoc's oil pipeline network, securing two decades of guaranteed returns. GIC also bought a stake in the business later.

Shares of Snam have fallen 11 per cent in Milan trading this year, giving the company a market value of about US$15 billion. The Italian company builds and operates gas pipelines in countries including Albania, Austria, China, France, Greece, and the UK, according to its website.

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