Wintershall, DEA Signal Intention to Merge
BASF and LetterOne have signed a letter of intent to merge their oil and gas subsidiaries Wintershall and DEA.
The joint venture, which would operate under the name Wintershall DEA, aims to create a basis for ‘further profitable growth’, according to a Wintershall statement.
In the next few months, BASF and LetterOne will prepare and conduct a confirmatory due diligence and negotiate definitive transaction agreements. Closing could occur in the second half of 2018, subject to customary regulatory approvals. Until the closing, Wintershall and DEA will continue to operate as independent companies.
BASF would determine the chief executive officer and LetterOne the deputy chief executive officer of the new company, which would be headquartered in Kassel and Hamburg, Germany.
Based on the valuation of the exploration and production businesses, BASF would initially hold 67 percent and LetterOne shall hold 33 percent in Wintershall DEA.
In 2016, the combined business had pro-forma sales of $5 billion (EUR4.3 billion), EBITDA of $2.5 billion (EUR2.2 billion) and net income of $382 million (EUR326 million). Overall, production volumes of Wintershall and DEA amounted to 215 million barrels of oil equivalent (boe) in 2016, or 590,000 boe per day.
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