A unit of Abu Dhabi National Oil Co. is reportedly exploring the possibility of investing in UGI Corp.’s propane distribution unit AmeriGas, as per sources familiar with the matter. State-owned Adnoc is in discussions with advisors regarding a potential stake purchase in AmeriGas, with the transaction potentially valuing the company at several billion US dollars.
If Adnoc decides to move forward with the investment, it is likely to be carried out through its publicly listed retail arm Adnoc Distribution. This potential deal would mark Adnoc’s first significant acquisition in the US, as the company seeks to diversify its operations beyond crude oil. However, discussions are still ongoing, and the outcome is uncertain at this time.
UGI, based in Pennsylvania, had announced in August that it was exploring strategic alternatives for its liquefied petroleum gas business, with the assistance of Goldman Sachs Group Inc. and JPMorgan Chase & Co. Adnoc’s reported interest in AmeriGas has caused UGI’s stock to rise significantly in New York trading.
Adnoc is among several Middle Eastern companies seeking to expand their operations as the demand for crude oil is expected to decline due to the energy transition. In addition to the potential investment in AmeriGas, Adnoc has also been in negotiations with German chemical company Covestro AG. UGI, in addition to its propane distribution business, also operates in natural gas distribution and electric utility sectors, as well as having an international presence in Europe.