Irish-listed oil and gas producer Tullow Oil has acquired Capricorn Energy in an all-stock deal.
Under the terms of the deal, shareholders in Capricorn, which was formerly known as Cairn Energy, will receive 3.8068 Tullow shares for each share they current hold.
Capricorn shareholders are then expected to own 47% of the combined group, while Tullow shareholders will own the remaining 53%.
As reported by Reuters, the deal between the companies is valued at £656.9m (€771.2m).
Current Tullow chief executive Rahul Dhir will lead the combined group, while Capricorn’s chief financial officer James Smith will stay in his position in the new company.
The headquarters of the combined group will be at Tullow’s existing offices in London.
The companies said that the newly combined group will focus on the African region due to the “deep portfolio of incremental high return investment opportunities” in several nations, including Ghana, Egypt and Côte d’Ivoire.
It also expects to be an important supplier of gas in Egypt and Ghana.
In March, Tullow said it was focusing on projects in Ghana and was looking for a partner in Kenya. It was also exploring a well in Gabon.
Capricorn also has a significant Eygpt portfolio.
The larger group is also expected to save $50m annually within two years of the deal’s completion due to reduction of duplicate costs, including office space and IT.