BASFY BASF SE (QX)

By Ian Walker

Harbour Energy said it would buy most of the upstream assets of oil-and-gas producer Wintershall Dea for $11.2 billion in cash and shares from its shareholders BASF and LetterOne.

The U.K. oil-and-gas company said Thursday that the deal includes all of Wintershall Dea's upstream assets in Norway, Germany, Denmark, Argentina, Mexico, Egypt, Libya and Algeria as well as its carbon-dioxide capture and storage licenses in Europe.

It excludes Wintershall Dea's assets located in Russia or those held in joint ventures with Russian companies, as well as Wintershall Dea's stake in WIGA Transport Beteiligungs. Earlier this week, Russia moved to transfer the stakes that Wintershall Dea and Austria's OMV hold in a joint venture operating the Yuzhno-Russkoye field in Western Siberia to a new entity.

Harbour said Thursday that the deal would transform it into one of the world's largest and most geographically diverse independent oil and gas companies, and would boost its free cash flow and support enhanced and sustainable shareholder returns.

"Today's announcement marks Harbour's fourth major acquisition and the most transformational step yet in our journey to build a uniquely positioned, large-scale, geographically diverse independent oil and gas company," Chief Executive Linda Cook said.

Upon completion of the acquisition, German chemicals giant BASF--which has a 72.7% stake in Wintershall Dea--will own 46.5% of Harbour's shares.

BASF will be able to nominate two nonexecutive directors to Harbour's board for as long as it owns at least 25% of the company's shares, and one director if that drops to between 25% and 10%.

The acquisition comes amid a wave of deal making in the sector. In October, Exxon Mobil paid nearly $60 billion to buy Pioneer Natural Resources, while Chevron earlier paid $53 billion for its takeover of Hess. Occidental Petroleum earlier this month agreed on a $10.8 billion deal for CrownRock.

Oil prices have slipped a little this year after sharp rises in 2022 that fueled record profits, paving the way for the merger wave as companies look to maximize returns on their assets.

Harbour Energy shares at 1432 GMT were up 31.0 pence, or 13%, at 274.90 pence. However, they are currently down 9.9% over the year to date.

BASF shares are up 1% at EUR48.96 and up 4.9% over the year to date.

Write to Ian Walker at ian.walker@wsj.com

(END) Dow Jones Newswires

December 21, 2023 10:05 ET (15:05 GMT)

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