TOKYO: Mitsubishi Corp is in advanced talks to buy the assets of Aethon Energy Management for close to US$8bil, according to sources, in what would be the Japanese conglomerate’s biggest ever acquisition.
Mitsubishi could announce a deal with the US energy-focused investment firm in the next couple of months, according to the sources.
Abu Dhabi National Oil Co had also been considering a potential transaction involving Aethon, Bloomberg News reported in April.
A deal would likely be structured as a purchase of Aethon’s portfolio, which includes natural gas production operations and midstream assets.
Dallas-based Aethon is among the most active drillers in the Haynesville shale basin that straddles East Texas and northern Louisiana.
Aethon is close to several liquefied natural gas (LNG) export terminals along the Gulf Coast.
Mitsubishi, one of Japan’s major trading companies, is a key supplier of LNG and has a stake in a US export facility in Louisiana.
Japan’s government sees the artificial intelligence (AI) boom potentially lifting power demand over the next decade, and has urged the nation’s private firms to invest in gas.
The talks mean that Mitsubishi is looking to double down on one of its most profitable business segments: natural gas.
Japan’s trading houses, which include Warren Buffett’s Berkshire Hathaway Inc as an investor, have outperformed the market over the last few years due in part to strong profits from overseas gas and LNG projects.
“Given the shortage of power due to AI demand, everything related to energy is generally positive,” said Shuji Hosoi, senior strategist at Daiwa Securities Co.
That said, there are worries about whether it may be overpaying for the purchase, like the steep premium Nippon Steel Corp hads agreed to pay for US Steel Corp. — Bloomberg
