* Deal will enable Glencore to expand in upstream sector
* Puts an end to Caracal/TransGlobe Energy merger
* Caracal shares surge more than 58 pct on the news
(Adds analyst comment, details on deal and on Glencore's
presence in Chad)
By Sarah Young and Silvia Antonioli
LONDON, April 14 Mining company Glencore Xstrata
has agreed to buy Chad-focused oil company Caracal
Energy for about 800 million pounds ($1.3 billion), a
deal that will allow the commodity giant to expand upstream in
the oil sector.
The sale puts an end to Caracal's proposed merger with
Canada's TransGlobe Energy Corporation.
Swiss-based commodity producer and trader Glencore agreed to
pay 550 pence per share for Caracal, which has been its partner
in Chad since 2012, the two companies said in a joint statement
put out by Glencore on Monday. The price represents a 61 percent
premium to Caracal's closing share price on Friday.
Caracal said it had terminated the proposed merger with
TransGlobe and had paid a break-fee of $9.25 million to the
Canadian company for abandoning the deal, the statement said.
Caracal's shares surged more than 58 percent in London after
the announcement on Monday to 540.6 pence. Shares of TransGlobe
were up 0.3 percent in Toronto by 1418 GMT.
"Glencore is already in Chad, so they'll be knowledgeable of
the assets, and oil is certainly an area that they have
indicated they want to get into to a larger degree to create
more diversification. So this acquisition fits in with their
strategy," said Investec analyst Marc Elliott.
In 2011, Caracal entered into three production-sharing
contracts with the Republic of Chad which give the company and
its partners exclusive rights to explore and develop reserves
and resources in an area of southern Chad.
Glencore bought a 33 percent stake in those three contracts
in 2012 and also acquired from Caracal a 25 percent share in the
Magara and Badila fields which are expected to start exporting
through the Chad-Cameroon pipeline later this year.
The Swiss-based producer-trader then boosted its stake in
the fields to 35 percent by buying an additional 10 percent
stake from Chad's state oil company SHT. It also has offtake on
Caracal production and export offtake rights for 90 percent of
SHT's oil production under a separate pre-financing deal.
On Monday, Glencore also announced the long-awaited sale for
$6 billion of its Las Bambas copper mine in Peru to a Chinese
Shares in Glencore were up 1 percent in London on Monday,
outperforming a flat market.
($1 = 0.5980 British pounds)
(Editing by Paul Sandle and Susan Fenton)