Kuwait fund’s UK unit to buy oil firm for $1.7B

london — The British infrastructure arm of Kuwait’s sovereign wealth fund has agreed to buy oil and gas pipeline firm North Sea Midstream Partners (NSMP) for around £1.3 billion ($1.7 billion) from ArcLight Capital, according to two sources.

Wren House, the Londonbased infrastructure investment arm of the Kuwait Investment Authority (KIA), fought off bids from JP Morgan, Blackstone and private equity fund KKR to buy NSMP, according to one of the sources.

“Wren House was bidding against some very big players and they simply offered the best terms,” said the source. Its bid was lower than one other but it offered better overall terms, according to one of the sources.

The current management team, including NSMP CEO Andy Heppel, will remain, the source said.

NSMP was valued at around £1.2 billion to £1.3 billion ($1.6 to $1.7 billion), the sources said.

Bank of America Merrill Lynch advised ArcLight on the transaction. Freshfields Bruckhaus Deringer was ArcLight’s legal adviser. Wren House was advised by Jefferies and Macquarie Capital. Its legal advisor was Slaughter and May.

The Sovereign Wealth Fund Institute ranks KIA as the world’s fourth-biggest sovereign fund, managing $592 billion. Only Norway, China and the UAE have bigger sovereign funds.

Wren House is headed by Hakim Drissi Kaitouni, a former investment banker who worked at Bank of America Merrill Lynch in London and New York.