WINTERSHALL & LETTERONE MERGER

MEOG - Chemicals company BASF and investment company LetterOne signed a transaction agreement to merge their respective oil and gas businesses in a joint venture, which will operate under the name Wintershall DEA.

"With Wintershall DEA we create the leading independent European exploration and production company with international operations in core regions. By combining the two German-based entities, BASF and LetterOne lay the basis for further profitable growth," said Dr. Hans-Ulrich Engel, vice chairman of the board of executive directors and CFO of BASF SE. In the medium term, BASF and LetterOne plan to list Wintershall DEA through an Initial Public Offering (IPO).

Closing of the transaction is expected in the first half of 2019, subject to approvals of merger control and foreign investment authorities as well as mining authorities and the German Federal Network Agency. Until closing, Wintershall and DEA will continue to operate as independent companies.

In 2017, the combined business of Wintershall and DEA had pro-forma sales of €4.7 billion, income from operations before depreciation and amortization (EBITDA) of €2.8 billion and net income of €740 million. In 2017, pro-forma hydrocarbon production of Wintershall and DEA totaled 210 million barrels of oil equivalent (BOE); this equals a production of around 575,000 BOE per day.

The joint venture will have a regionally more balanced footprint with growth opportunities in the core regions and strives for a daily production of 750,000 to 800,000 BOE between 2021 and 2023. Through the merger, synergies of at least €200 million per year are expected as of the third year following the closing of the transaction.

Mario Mehren, CEO of Wintershall, will be the chairman of the Mlmanagement board and CEO of Wintershall DEA. Maria Moraeus Hanssen, CEO of DEA, will be the deputy CEO and COO of the joint venture.

LetterOne will contribute all its shares in DEA into Wintershall Holding GmbH against the issuance of new shares of the company to LetterOne. Wintershall will then be renamed Wintershall DEA, which will be headquartered in Kassel and Hamburg. BASF will initially hold 67% and LetterOne 33% of Wintershall DEA's ordinary shares reflecting the value of the respective exploration and production businesses of Wintershall and DEA. To reflect the value of Wintershall's gas transportation business, BASF will receive additional preference shares. No later than 36 months after closing but in all cases before an IPO, these preference shares will be converted into ordinary shares of the company Wintershall DEA. This will result in a total shareholding of BASF in Wintershall DEA of 72.7%.

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Earlier:

2017, December, 22, 22:00:00 LETTERONE & WINTERSHALL MERGER FT - Mr Fridman would acquire an interest in the Wingate gas platform off the east coast of England as part of a proposed merger between DEA, an energy company he controls, and Wintershall of Germany, which operates the UK field.

2017, December, 13, 12:20:00 LETTERONE & BASF MERGER LETTERONE - BASF and L1 Energy, the energy investment arm of LetterOne, announce their intention to merge their oil and gas subsidiaries.

2017, April, 25, 18:40:00 NORD STREAM - 2 INVESTMENT Nord Stream 2 AG signed financing agreements for the Nord Stream 2 pipeline project with ENGIE, OMV, Shell, Uniper and Wintershall.

2017, March, 3, 18:55:00 GAZPROM'S $11 BLN The group was forced in August to abandon plans to split the cost of the 1,200km Nord Stream 2 pipeline under the Baltic Sea with the project’s European partners Engie, OMV, Wintershall, Shell and Uniper.

2016, May, 27, 20:05:00 СЕВЕРНЫЙ ПОТОК - 2: € 8 МЛРД. Nord Stream 2 – консорциум будущих акционеров проекта, куда входят «Газпром», BASF/Wintershall, Uniper, Engie, OMV и Shell. «Северный поток – 2» протяженностью около 1200 км пройдет по дну Балтийского моря от российского побережья до Германии. Пропускная способность двух ниток – 55 млрд куб. м в год, он должен вдвое увеличить мощность газопровода «Северный поток» .

2015, October, 15, 19:35:00 THE NEW RUSSIAN EMPIRE - 10 DEA Deutsche Erdoel (DEA), a company based in Germany controlled by Russian billionaire Mikhail Fridman’s investment firm LetterOne, signed an agreement to buy 100% of E.ON’s shares in E.ON E&P Norge for $1.6 billion, explaining that the transaction will allow DEA doubling its current production in Norway.

2015, July, 8, 19:20:00 СЕВЕРНЫЙ ПОТОК - II «Северный поток I» — экспортный газопровод мощностью 55 млрд куб. м газа в год, проложенный по дну Балтийского моря из России в Германию. Оператором проекта является совместное предприятие Nord Stream AG («Газпром» — 51%, Wintershall и E.ON — по 15,5%, Gasunie и ENGIE — по 9%). Русский | English