Shell to acquire renewable natural gas producer Nature Energy

Shell invested US$2 billion to buy Denmark's Nature Energy.

Shell Petroleum NV, a wholly owned subsidiary of Shell, has reached an agreement with Davidson Kempner Capital Management LP, Pioneer Point Partners and Sampension to acquire 100% of the shares of Nature Energy for nearly $2 billion. The acquisition will be absorbed within Shell's current equity range, which remains unchanged.

Based in Denmark, Nature Energy is a producer of renewable natural gas (RNG) from agricultural, industrial and household waste.

By purchasing Nature Energy's shares, Shell will acquire Europe's largest RNG producer, its portfolio of cash-generating operating plants, associated feedstock supply and infrastructure, its portfolio of growth projects and its in-house expertise in the design, construction and operation of innovative and differentiated RNG plant technology.

This acquisition will further enhance Shell's ability to work with its established customer base across multiple sectors to accelerate its transition to net zero emissions. It will also support Shell's ambition to profitably grow its low-carbon fuels production and customer offering in our world-leading customer-focused marketing business.

"Shell's competitiveness in low-carbon fuels derives from capabilities across the value chain, combining a world-class commercial and supply organization with access to differentiated technology and production assets," said Huibert Vigeveno, Shell's director of production operations. "The acquisition of Nature Energy will add a European production platform and growth pipeline to Shell's existing RNG projects in the United States. We will use this acquisition to build an integrated RNG value chain on a global scale, at a time when energy transition policies and customer preferences indicate strong demand growth in the coming years."

The transaction is subject to regulatory approvals and is expected to close in the first quarter of 2023. Nature Energy is cash generative, and the acquisition is expected to be accretive to Shell's earnings from completion and generate double-digit returns.