US-backed Boehly consortium challenges Carlyle for Lukoil assets

A consortium led by billionaire financier Todd Boehly, backed by the US government and Gulf investors with ties to the Trump family, has mounted a challenge to private equity firm Carlyle’s agreed purchase of Lukoil’s international assets, setting up a contest that places Washington in the unusual position of bidding for assets while another part of the administration decides their fate.

Boehly, who sold his stake in Chelsea Football Club last week, has been working on the potential acquisition for months, according to two people close to the process. His consortium includes the US International Development Finance Corporation, Sheikh Tahnoon bin Zayed al-Nahyan, brother of the UAE’s president, and Qatar’s Al-Khayyat family, which has worked closely with the White House and Trump family members on property and energy projects.

The DFC, a federal agency that invests in overseas projects, is expected to take a mid-teens equity stake in the new company, according to two people familiar with the matter. The agency is headed by Ben Black, son of Apollo co-founder Leon Black. Sheikh Tahnoon’s International Holding Company is expected to lead the consortium alongside Allied Investment Partners of the UAE, with the Al-Khayyat family taking a smaller stake. Boehly and the DFC would control a majority of the board.

The proposal comes ten months after Lukoil agreed to sell its international business to Carlyle following US sanctions on the Russian oil company. That transaction has stalled in Washington awaiting final approval. Lukoil’s overseas assets, valued at $20bn when written off in March, include oil and gas fields from central Asia to Mexico, thousands of petrol stations, and a large European refining portfolio. The sale represents a rare opportunity to acquire more than 3bn barrels of proven and probable reserves, as well as some of Bulgaria and Romania’s largest refineries.

The Boehly group has not yet finalised a deal with Lukoil. People familiar with the matter said its proposal was advanced, though the extent of any conversations between the parties was unclear. Other bidders who had previously expressed interest in some or all of the assets have now dropped out, according to one person familiar with the process.

The structure of the bid raises questions about whether Carlyle would be disadvantaged if pitted against a consortium involving the US government and investors with ties to the administration, in a decision made by the White House. One person familiar with the process acknowledged the concern.

The Al-Khayyat brothers have emerged as increasingly prominent partners in projects involving figures close to the Trump administration. The family holds a stake in an Albanian property development involving Ivanka Trump and Jared Kushner, is pursuing a potential reconstruction of Syria’s pipeline network as part of a project involving Tom Barrack, the US special envoy to Syria and a longtime Trump associate, and has secured an oilfield concession in Libya through its controlled company UCC.

The contest for Lukoil’s assets is a test of how the administration handles a transaction that sits at the intersection of sanctions policy, energy security, and the business interests of those connected to the White House. The outcome will signal whether the US government can credibly act as both bidder and regulator in the same deal, and whether the promise of a rare energy prize outweighs the governance questions the arrangement raises.