Shareholders of 3R Petroleum (RRRP3) and Enauta (ENAT3) have approved the incorporation of Enauta’s shares by 3R Petroleum.
This decision follows separate meetings and includes appointing a new board of directors post-merger.
Enauta shareholders will receive 0.809225 shares of 3R for each Enauta share they own.
This merger positions the new entity favorably in the consolidation landscape, with JPMorgan highlighting its financial and commercial synergies.
The bank reiterated its overweight rating for 3R with a target price of R$ 60. Regulatory approval, including from antitrust authority CADE, is the next step.
Analysts at BBI believe this process will be straightforward, with completion expected by July or early August.
Bradesco BBI sees the merger creating a well-diversified company with appropriate leverage and multiple growth options.
The new entity aims to provide consistent returns to shareholders throughout its expansion.
Santander expects the merger to complete within 30 to 60 days, after fulfilling specific conditions and allowing Enauta shareholders the right of withdrawal.
The final number of shares for Enauta and Maha shareholders will be confirmed in a board meeting, setting a transaction closing date.
Santander notes that while a lock-up structure is unlikely due to differing strategies, many investors are eyeing long-term appreciation potential.
The new company’s strong free cash flow yield of 45%, despite higher capital expenditures for Papa-Terra, Oliva, and Atlanta projects, supports solid yields.
This financial strength helps mitigate investment risks. Santander recommends buying 3R and Enauta, with target prices of R$ 48 and R$ 39, respectively.
Brazil’s 3R and Enauta Merge: What’s Next?
In a broader context, this merger reflects the ongoing trend of consolidation in the oil and gas sector, driven by companies seeking efficiency and market strength.
The merger promises to position the combined entity as a Latin American leader in oil and gas.
It aims for growth, balance, and resilience, forecasting output to surpass 100,000 barrels daily.
This entity will also oversee over 700 million barrels in reserves, showcasing a diversified portfol
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