Oil and gas explorer IGas has agreed to take over rival Dart Energy in an all-share deal valuing the company at £117m and creating Britain's largest shale gas explorer weeks before the launch of a major licensing round.
The deal, which is subject to board and regulatory approvals but expected to be concluded in September, will see Dart shareholders take a 30.5 per cent stake in the enlarged IGas company.
"The transaction further strengthens our position financially, operationally and also significantly increases our licensed acreage as we seek to unlock the untapped energy resource that exists in Britain," IGas chief executive Andrew Austin said.
The takeover will give IGas access to over 1 million acres of licensed land in Britain under which it can drill for oil and gas, including major shale gas sites.
IGas and Dart already have UK shale gas farm-in agreements in place with French energy companies Total and GDF Suez, respectively, giving major oil and gas company backing to the new entity.
The British government is launching a major onshore licensing round in the early summer, a tender expected to attract huge interest in shale gas acreage.
IGas said it planned to sell all non-UK assets which Dart own, including those in Australia, Germany, Belgium, Indonesia and India.
Dart will also cancel its listing on London Alternative Investment Market (AIM), which had been scheduled for 12 May.
Shares in IGas traded up 0.4 per cent at 130.89 pence at 1018 BST, while Dart Energy shares fell 7.4 per cent in Australia