Azerbaijani oil and gas company Socar has reached an agreement to acquire the Turkish business of German energy company EWE for an undisclosed amount to enhance its position in the country.
The company announced that it will distribute natural gas to industrial cities of Kayseri and Bursa.
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The acquisition includes EWE’s operations in Turkey, including Bursagaz and Kayserigaz, the gas distribution networks, and the EWE Enerji and Enervis businesses, which focus on energy trade and service.
Socar also bought a telecom company Millenicom within EWE Turkey Holding.
Socar president Rovnag Abdullayev said: “The purchase of this natural gas distribution business will complete our investment chain in Turkey, creating additional value for Azerbaijan and Turkey.”
The company noted that it has been supplying natural gas to the Turkish market for the last 12 years.
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By GlobalDataThis year, the company started expanding its operations in the country through the Trans Anatolian Natural Gas Pipeline (TANAP), in which it owns a 58% stake.
A joint project between Turkey and Azerbaijan, TANAP is part of the Southern Gas Corridor, which will connect the giant Shah Deniz gas field in Azerbaijan to the Europe markets through different pipelines.
Socar’s acquisition of EWE Turkey is expected to create ‘favourable’ conditions for the company to gain direct access to the end customer market in Turkey.
Abdullayev added: “The synergies created by purchasing EWE’s assets in Turkey will bring significant benefits to the economies of Azerbaijan and Turkey.
“Thus, SOCAR’s entry into the natural gas distribution business in Turkey is a commercially expedient strategic step that completes the links of the production-transportation-distribution chain.”
He further stated that following the integration of EWE assets, the company will continue to evaluate other opportunities in the Turkish market.
The completion of the acquisition is subject to the receipt of regulatory approvals and is expected to take place in the first half of this year.
EWE Turkey has been operating in the country since 2007. The company achieved a turnover of around YTL2.4bn ($454.46m) by the end of 2017.
