BASF, LetterOne complete merger of oil and gas operations

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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.