BP to buy US biogas producer Archaea Energy for £3.6bn

BP has sealed a 4.1 billion dollar (£3.6 billion) deal to buy US renewables firm Archaea Energy.

The move for the biogas producer is the latest deal by BP designed to rapidly grow its alternative fuels business in an effort to support its net zero ambitions.

The British oil major has offered to buy Archaea for 26 dollars per share, representing 3.3 billion dollars and will take on debt worth a further 800 million dollars.

BP said it will roughly double the company’s expected earnings from renewable natural gas, taking this to around 2 billion dollars by 2030.

Houston-based Archaea Energy operates around 50 renewable natural gas and landfill gas-to-energy facilities across the US.

Bernard Looney, chief executive of BP, said: “Archaea is a fantastic fast-growing business, and BP will add distinctive value through our trading business and customer reach.

“It will accelerate our key bioenergy growth engine, creating a real leader in the biogas sector, and support our net zero ambition.

“And, importantly, we’re doing this while remaining focused on the disciplined execution of our financial frame.

“Investing with discipline into the energy transition, creating further value through integration – this is exactly what BP’s transformation into an integrated energy company is all about.”

Shares in BP were 1.1% lower to 449.9p on Monday, despite the deal.