(Bloomberg) -- A unit of Abu Dhabi National Oil Co. is considering a potential investment in UGI Corp.’s propane distribution unit AmeriGas, according to people with knowledge of the matter. 

State-owned Adnoc is working with advisers to discuss the possible purchase of a stake in AmeriGas, the people said, asking not to be identified because the information is private. A transaction could value AmeriGas at several billion US dollars, according to the people.

The Middle Eastern energy giant would likely do the investment through its listed retail arm Adnoc Distribution if it decides to proceed, according to the people. A deal would mark Adnoc’s first major acquisition in the US, and comes as it attempts to diversify beyond crude. 

Deliberations are ongoing and there’s no certainty they will lead to a transaction, the people said. A representative of Adnoc declined to comment, while UGI didn’t immediately reply to a request for comment.

Shares of UGI jumped 6.4% to $25.31 at 11:14 a.m. in New York after Bloomberg News reported Adnoc’s interest in a deal. The stock has fallen 27% over the past year.

UGI, based in King of Prussia, Pennsylvania, announced in August that it was exploring strategic alternatives. The company said it was working with Goldman Sachs Group Inc. and JPMorgan Chase & Co. on a review focused on its liquefied petroleum gas business.

UGI agreed in 2019 to buy the AmeriGas shares it didn’t already own for $2.4 billion, valuing the propane distributor at about $3.3 billion.

Adnoc, along with other Middle Eastern companies, has been trying to broaden its operations as demand for crude is expected to decline amid the energy transition. It has also been negotiating with German chemical company Covestro AG after its latest offered valued it at €11.3 billion ($12 billion).

UGI also operates a natural gas distribution business and an electric utility, and has an international propane distribution business in Europe.

--With assistance from Phil Serafino and Eyk Henning.

(Updates with stock move in fifth paragraph.)

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