Mitsubishi Corp in talks for $8 billion US shale acquisition, source says

June 16 (Reuters): Mitsubishi Corp (8058.T) is in talks to acquire the US shale production and pipeline assets of Aethon Energy Management for roughly $8 billion, a person familiar with the matter said on Monday.

A deal would give the Japanese conglomerate a substantial natural gas operation adjacent to the US Gulf coast and the energy export facilities being developed along it.

Talks between Mitsubishi and Aethon are ongoing, said the source, who cautioned that there was no guarantee a transaction would be agreed, and spoke on condition of anonymity to discuss confidential deliberations.

While the assets are owned and operated by US energy-focused investment firm Aethon, fellow money managers RedBird Capital Partners and Canada’s Ontario Teachers’ Pension Plan also hold sizable stakes.

Mitsubishi, Aethon, RedBird and the Ontario pension plan declined to comment.

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Shares in Mitsubishi edged lower in early Tuesday trading in Tokyo following the news, down 0.3 percent to 2,880 yen, compared with a 0.3 percent gain in the broader benchmark Nikkei 225 index (.N225).

Mitsubishi is a major player in the global LNG sector, engaging across the full value chain – from upstream production to trading, marketing, and logistics. It holds equity in multiple LNG projects worldwide, including stakes in Malaysia, Oman, Australia, Russia, the US, and Canada, with total equity LNG production of about 13 million metric tons per year.

The upstream assets of Aethon, which primarily focus on the Haynesville shale formation in Louisiana and East Texas, constitute one of the largest privately held US gas producers.

Reuters reported in November that Aethon was exploring options for its operations, which also include more than 1,400 miles (2,250 km) of pipelines across the Haynesville basin and Wyoming, where Aethon also has some production assets.

Bloomberg News earlier on Monday reported the talks between Mitsubishi and Aethon.