Colony Capital to buy Libyan oil company in €4bn deal

The Los Angeles-based firm will acquire a 65 percent stake in the company, which owns and operates more than 3,000 service stations across Europe.

Private equity real estate firm Colony Capital has agreed to purchase a majority stake in Tamoil, an oil refiner and distributor owned by the Libyan government, in a deal that values the Switzerland-based company at €4 billion ($5.4 billion).

Colony will purchase a 65 percent stake in Tamoil, while the Libyan government will retain the remainder. Tamoil operates more than 3,000 service stations throughout Europe and owns refineries in Italy, Switzerland, Spain and Germany. The company also has operations in Africa, which are not part of the Colony transaction.

The Libyan government has been looking to sell the company for some time. Two years ago, Seif Al-Islam, the son of Libya’s leader, Colonel Muammar Gaddafi, said managing the company was a “burden.”

It is understood that Colony trumped The Carlyle Group, a regular investor in the energy sector, in the battle for Tamoil.

Colony, which was founded in 1991, has been one of the most active investors in the casino industry. In addition to investments in the Las Vegas Hilton, Resorts International and Kerzner International, the firm has also teamed up with the founding family of US gaming company Station Casinos to explore a potential $5.5 billion buyout.

Over the past year, Colony has also branched out into non-traditional deals, such as the purchase of a nine percent stake in French retailer Carrefour alongside entrepreneur Bernard Arnault and the acquisition of French football team Paris Saint Germain alongside Morgan Stanley and Butler Capital.

The deal with Colony is the latest sign that Libya is emerging from its decades-long period of isolation and international sanctions. After abandoning its nuclear weapons program and compensating the victims of terrorist attacks, Libya’s relations with the West have improved and the country has taken steps to liberalize its economy by relaxing its property laws and making it easier for foreign oil firms to operate in the country.