EnQuest bows out of Serica deal as market jitters hinder agreement on terms

May 2 (Reuters) - North Sea-focused oil producer EnQuest ENQ.L will not make an offer for UK's Serica Energy SQZ.L, the companies said on Friday, as the two could not agree on favourable terms in time amid market volatility.

EnQuest shares were down about 5% at 13.14 pence, while Serica shares were up 0.3% at 127 pence at 1623 GMT.

Serica said in March it was in talks with EnQuest about a possible deal. The termination occurs amid a broader wave of economic uncertainty fueled by sweeping global tariffs imposed by U.S. President Donald Trump.

The energy sector has been particularly rattled in early 2025, as recessionary concerns have weighed heavily on oil demand expectations, dragging prices lower as investors brace for a slowdown in global consumption.

Simultaneously, the OPEC+ alliance has been ramping up oil output, adding to global supply and compounding the downward pressure on prices.

The ripple effects of the trade tensions extend beyond energy. U.S. crop commodities trader Bunge Global's BG.N planned $34 billion merger with Glencore-backed GLEN.L Viterra is being stalled due to escalating U.S.-China trade friction, Bloomberg News reported on Friday, citing people familiar with the matter.

The trade tensions have also significantly narrowed the window for initial public offerings. Among the companies that have recently put their IPO plans on hold are Swedish fintech firm Klarna KLAR.N, San Francisco-based Chime, and ticketing platform StubHub.

EnQuest's decision came hours ahead of a "put up or shut up" deadline on Friday for the proposal, which would have given Serica shareholders a majority stake in the combined company and returned capital to investors.

Serica said it was confident in its "standalone ability to generate significant cash flow and deliver shareholder value and highly competitive shareholder returns."