In a second setback to its global acquisition plans in less than a month Reliance Industries has lost out on its USD 2 billion takeover bid for Calgary based Value Creation.

RIL lost the deal to British energy major BP Canada which has taken a controlling stake in Value Creation for around USD 1.2 billion. The debt laden Value Creation has substantial reserves of the oil rich sand deposits covering around 430 square miles.

An RIL spokesman declined to comment on the development. Value Creation said in a statement that BP would make significant capital contributions to the project and that the partnership with BP blended a strong asset, world-class operator, high caliber talents and market security, besides financial stability.

The company said it had received several solicited and unsolicited offers of interest from multiple parties, but the BP deal resolved the company’s debt.

Just two weeks ago, Netherlands-based Lyondell Basell Industries had rejected RIL’s USD 14.5 billion bid.
Analysts however believe that RIL quickly needs to deploy the cash it’s sitting on. “If we discount the failed acquisitions, there's no major positive trigger for RIL going forward. It’s necessary for the company to deploy the cash now. They need a significant national or international discovery, as having cash with them is not positive for the stock.”

(Sourced from Business Standard)