Reliance Industries of India in Bidding War with Chevron to Buy Atlas Energy

India’s largest private sector company, and one of the world’s largest energy companies, Reliance Industries Limited (RIL), is in a bidding war with Chevron to buy Atlas Energy. A primary motivator for both companies is the large number of net acres Atlas controls in the Marcellus Shale region. Just last year RIL and Atlas formed a joint venture, a deal that would have been worth $3.5 billion over ten years. Now that Atlas is on the block, RIL wants to tie the knot permanently. But another suitor has arrived and is vying for Atlas’ affections by offering $4.3 billion:

Mukesh Ambani-led RIL has offered to buy American shale gas company Atlas Energy’s assets in the US, rivaling a bid by Chevron Corporation. Atlas Energy disclosed this in a lengthy filing to the US Securities and Exchange Commission (SEC).

According to it, RIL had written a letter on January 10 where it mentioned that it wants to evaluate its options, including whether it “may be able to create incremental value for Atlas Energy and its constituencies.” In the letter, RIL mentioned itself as the “most natural and obvious” partner to buy the company that oil behemoth Chervon has agreed to purchase.

Atlas Energy had conducted an auction for a JV involving its acreage in the Marcellus shale, and RIL and Chevron had presented the two best proposals in such auction.

How high will the price go?

*The Times of India (Feb 2) – RIL natural buyer for Atlas assets