Talisman Energy ( TLM) agreed Thursday to acquire Paladin Resources of the U.K. for $2.14 billion in cash.

Calgary, Alberta-based Talisman said Paladin directors agreed to the deal and will vote their own aggregate 1.07% stake in favor. Shareholders controlling 6.3% of the stock have also agreed to sell to Talisman, and the company said it has acquired a 15% stake from Aberforth Partners and Caledonia Investments.

Paladin is a U.K. oil and gas exploration and production company whose shares are listed on the London Stock Exchange. Paladin has a portfolio of production and exploration assets predominantly in the Norwegian, U.K. and Danish sectors of the North Sea, as well as in Australia, Indonesia and Tunisia. It also has exploration acreage in Gabon and Romania.

"This is an attractive opportunity for Talisman and is a logical continuation of Talisman's successful business model," said CEO Jim W. Buckee. "It is rare to have the opportunity to acquire a set of properties with the fit that we see here in the UK Central North Sea and Norway. These assets lie predominantly within our experience and expertise. Talisman will be able to continue existing exploration and development activities and add new programs readily. For example, we have overlapping interests in the Egersund basin in Norway where there are attractive redevelopment and exploration opportunities. Development drilling in the Montrose and Arbroath area will benefit from the application of modern 4D seismic techniques.

"We expect the acquisition to be accretive to cash flow in 2006 and at least through Talisman's detailed planning period which extends to 2008," Buckee said. "It will help deliver production per share growth for Talisman which is now expected to be in excess of 10% per annum from 2006 through 2008."

Talisman closed Wednesday at $45.47.

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