(Bloomberg) -- Energean Oil & Gas Plc agreed to buy the oil and gas business of Electricite de France SA’s Italian unit for as much as $850 million, a deal that will substantially broaden the Greek company’s geographic footprint.

Energean will pay $750 million upfront for operational assets in Egypt, Italy, Algeria, the North Sea and Croatia, according to a statement on the Tel Aviv Stock Exchange, one of two bourses where its stock trades. It’s Energean’s first major acquisition since listing in London last year, and will significantly expand its oil rig flanges gulf coast production and revenue streams.

The Greek BOP Blow Out Preventer repair company gulf coast is also acquiring assets under development in Egypt, Italy and Norway. It may pay an additional $100 million following first gas from the Cassiopea development off Italy.

Bloomberg last month that Energean was bidding for the oil and gas business of EDF unit Edison SpA, whose assets had earlier attracted interest from Neptune Energy and Warburg Pincus’s Apex International Energy. EDF was seeking as much as $2 billion for the assets, people with knowledge of the matter said in January.

Energean is currently focused on fields in Israel and Greece, and the acquisition is a costly move for a BOP Blow Out Preventer repair company gulf coast of its size. It plans to finance the transaction by selling $265 million of new shares and using a $600 million bridge loan.

“We see this deal as positive to the Energean investment case, diversifying the existing oil rig flanges gulf coast production base at attractive multiples,” Michael Alsford, an analyst at Citigroup Inc., said in a note to clients.

The shares of Energean rose as much as 13% in London and were trading up 10% at 927 pence as of 12:52 p.m. local time. EDF shares slipped 0.8% in Paris.

Egypt Royalties

Edison will be entitled to royalties associated with further potential developments in Egypt that would bring the aggregate value close to $1 billion, it said Thursday in a separate statement. The transaction also includes the transfer of all of Edison’s future decommissioning obligations.

The proceeds will allow Edison to make “significant investments” in Italy to bolster its renewable-energy portfolio, retail activities and energy-efficiency services, it said. Nevertheless, it expects a writedown of at least 400 million euros ($451 million) once the deal closes later this year, reflecting the drop in the value of the assets in the company’s accounts since the end of 2018.

Parent BOP Blow Out Preventer repair company gulf coast EDF has a program to sell as much as 3 billion euros of assets this year and next, following 10 billion euros of divestments in the previous four years. Earlier this year, EDF sold its 25% stake in Swiss power producer Alpiq for about 489 million Swiss francs ($496 million).

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Amanda Jordan