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BASF, LetterOne complete merger of oil and gas operations
13 May 2019IHS Markit Chemical Expert
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BASF and the investment group LetterOne (Luxembourg) have
completed the merger of their upstream oil and gas operations. BASF
has 67% ownership of the resulting Wintershall DEA joint venture,
with LetterOne, the parent of DEA, holding the remaining 33% of the
company, reflecting the value of the respective exploration and
production (E&P) businesses. BASF says it will receive
additional preference shares, to reflect the value of Wintershall's
gas-transportation business. This will result in a higher BASF
stake in Wintershall DEA, 72.7%. BASF and LetterOne signed a
transaction agreement in September 2018 to merge Wintershall and
DEA. In 2018, the combined E&P entities had pro-forma annual
sales of €5.7 billion ($6.4 billion) and net income of €1.1
billion. Combined pro-forma hydrocarbon production last year was
215 million barrels of oil equivalent, with daily production of
590,000 b/d. The integration is expected to be completed within a
year, says BASF. An initial public offering (IPO) is planned for
the second half of 2020, subject to market conditions.
