BASF, L1 Sign Pact to Form Wintershall DEA
BASF and LetterOne (L1) signed a Business Combination Agreement to merge their oil and gas businesses and create Wintershall DEA, both announced late on September 27.
It follows their agreement to negotiate such an upstream merger late last year; then their merger agreement was expected in 1H2018 and completion by end-2018. The latter may now occur in late 1Q2019.
Wintershall DEA will be the largest independent European E&P company, they said, with activity in 12 countries across Europe (particularly Russia, Norway and Germany), Latin America, North Africa and the Middle East and combined pro-forma production of some 575,000 barrels of oil equivalent per day in 2017, almost 70% of which natural gas. Production is expected to rise to between 750,000 and 800,000 boe/d in the early 2020s.
In 2017, the combined business would have generated revenue of €4.7bn ($5.5bn) and earnings before interest, taxes, depreciation and amortisation (Ebitda) of €2.8bn, plus combined proven (1P) reserves of almost 2.2bn boe at end-2017. It will be jointly headquartered in Hamburg and Kassel. Germany's BASF will initially hold 67% and Luxembourg-based, Russian-owned L1 33% of Wintershall DEA.
LetterOne and BASF will now begin the process of seeking regulatory approvals, a process which could take roughly six months, they said. Until closing, DEA and Wintershall will operate independently. (Credit for photos: Wintershall)
