Neptune Oil & Gas Ltd. agreed to acquire a majority stake in French utility Engie's E&P business for $3.9 billion, the latest private equity-backed firm to enter the international energy sector.

For Engie, the sale marks a key step in its shift away from oil and gas to more regulated businesses such as power grids that allow more stable returns.

The deal, expected to close in first-quarter 2018, includes several fields in the U.K. and Norwegian North Sea and assets in Germany, Algeria, Egypt and Asia, producing more than 150,000 barrels per day of oil and gas equivalent.

Neptune, set up in 2015 and headed by former Centrica boss Sam Laidlaw, is backed by private equity funds The Carlyle Group and CVC Capital Partners.

"Our ambition is to create a leading international independent E&P company within the next five years," Laidlaw said in a statement.

Neptune joins other private equity-backed firms such as Chrysaor and Siccar Point which have acquired oil and gas assets from large firms such as Royal Dutch Shell Plc (NYSE: RDS.A) and Austria's OMV.

Engie said in a statement it had received a firm and binding offer from Neptune for its E&P unit based on a total valuation of 4.7 billion euros (US$5.11 billion), which includes 1.1 billion euros of decommissioning liabilities.

The deal is expected to reduce Engie's consolidated net financial debt by 2.4 billion euros when the deal is closed.

Engie CFO Judith Hartmann told reporters that, besides the decommissioning provisions, Neptune would also take over about 200 million euros of pension provisions.

The deal was reached after Neptune agreed to increase China Investment Corp.'s (CIC) stake in EPI to 49% from 30%, sources told Reuters last month. CIC had bought its 30% stake in 2011.

Neptune did not mention CIC in its statement.

Engie previously said it planned to sell 15 billion euros worth of assets between 2016 and 2018 to focus on contracted and regulated businesses such as energy services and grids. It has said it could realize 85% of the planned sales by the end of 2017. (US$1 = 0.9202 euros)

Offshore