Germany – BASF, LetterOne, and Harbour Energy have inked a transformative business combination agreement signaling a shift in BASF’s energy portfolio.
The agreement outlines the transfer of Wintershall Dea’s Exploration and Production (E&P) business, including producing and development assets, exploration rights, and carbon capture and storage (CCS) licenses to Harbour. This move comes as BASF endeavors to exit the oil and gas sector, aligning with its broader strategic goals.
The primary goal of this landmark transaction is for BASF to divest its stake in Wintershall Dea’s oil and gas ventures. The deal involves a total cash consideration of $2.15 billion, with BASF’s share amounting to $1.56 billion. Additionally, BASF will receive new shares issued by Harbour, securing a 54.5% shareholding in the expanded Harbour, marking a crucial step in the company’s strategic realignment.
The enterprise value assigned to Wintershall Dea’s assets stands at $11.2 billion, encompassing the transfer of outstanding bonds worth around $4.9 billion. This move positions BASF for a phased exit from the oil and gas business, with an eye on potential value creation through Harbour’s listing on the London Stock Exchange.
The Wintershall Dea headquarters, along with around 850 employees in Kassel and Hamburg, faces restructuring and eventual closure. Harbour plans to absorb some of the staff from the current headquarters, with detailed arrangements to be negotiated in the interim period between signing and closing. Employee representatives will be actively involved in accordance with legal regulations.
Regulatory landscape
Concurrently, the legal separation of Wintershall Dea’s Russia-related business progresses as planned. BASF and LetterOne retain ownership of the Russia-related business, which includes stakes in joint ventures, ownership interests, and shares in Nord Stream AG. The deal also sets the stage for the independent sale of Wintershall Dea’s stake in WIGA Transport Beteiligungs-GmbH & Co. KG, an entity engaged in the German gas transport business.
The consummation of this significant transaction is contingent on regulatory approvals from merger control and foreign investment authorities across multiple countries. The targeted closing is set for the fourth quarter of 2024.
In the first half of 2023, the combined business generated pro-forma revenue of $5.1 billion and EBITDAX of $3.7 billion. With a production volume of 513 thousand barrels of oil equivalent per day, the strategic alignment aims to bolster financial performance.
