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(Alliance News) - BP PLC on Wednesday said it completed the acquisition of Archaea Energy Inc, which it announced in October.
The USD3.3 billion acquisition is part of BP's focus on expanding its bioenergy business.
Dave Lawler, chair & president of bp America said: "We see enormous opportunity to grow our bioenergy business by bringing Archaea fully into bp. The talent, expertise and passion of their team has let them achieve incredible growth so far, and we're excited to support the next chapter in line with our strategy."
BP explained: "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."
Two months ago, the London-based oil major said the acquisition will accelerate the growth of its strategic bioenergy transition growth engine.
On October 17, BP said it will pay USD26 per Archaea share, a 54% premium to the New York Stock Exchange listing's closing price on October 14 and a 38% premium to its average price over the 30 days before October 17.
Houston, Texas-based Archaea operates 50 renewable natural gas and landfill gas-to-energy facilities across the US, "with development pipeline supporting potential for around five-fold increase in RNG volumes by 2030", BP had noted two months ago.
Once integrated, the acquisition is expected to be accretive to earnings and free cash flow per share, and to deliver "double-digit returns".
The purchase will double the earnings before interest, tax, depreciation and amortisation that BP expects from biogas to around USD2 billion by 2030. It also supports an increase in the oil firm's target of Ebitda from transition growth businesses to reach more than USD10 billion by 2030, compared to USD9 to USD10 billion previously.
BP shares rose 2.7% to 487.86 pence each in London on Wednesday afternoon.
By Tom Budszus, Alliance News reporter
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