BASF, LetterOne and Harbour Energy (Harbour) signed a business combination agreement to transfer Wintershall Dea’s E&P business consisting of its producing and development assets as well as exploration rights in Norway, Argentina, Germany, Mexico, Algeria, Libya (excluding Wintershall AG), Egypt and Denmark (excluding Ravn) as well as Wintershall Dea’s carbon capture and storage (CCS) licenses to Harbour.

In exchange, at closing, the shareholders of Wintershall Dea – BASF (72.7%) and LetterOne (27.3%) – will receive total cash consideration of $2.15 billion (BASF share: $1.56 billion) and new shares issued by Harbour equating to a total shareholding in the enlarged Harbour of 54.5% (BASF share: 39.6%). The agreed enterprise value for the Wintershall Dea assets amounts to $11.2 billion. This amount includes the outstanding bonds of Wintershall Dea with a nominal value of around $4.9 billion that will be transferred to Harbour at closing.

With this transaction, BASF takes a major step towards achieving its announced strategic goal to exit the oil and gas business. After closing, the transaction creates optionality for monetization of BASF’s stake in the combined company, as Harbour is listed on the London Stock Exchange. “In addition to the cash component, the shares in Harbour that BASF will receive upon completion of the transaction offer significant potential for value creation and allow for a gradual and optimized exit from the oil and gas business over the next few years,” said Dr. Dirk Elvermann, Chief Financial Officer of BASF SE.

Wintershall Dea’s headquarters and the related staff are not part of the transaction. This will require further restructuring and ultimately the closure of the headquarters’ units in Kassel and Hamburg that currently have around 850 employees.

In the first half of 2023, the combined business had pro-forma revenue of $5.1 billion and EBITDAX of $3.7 billion. Overall, production volumes of Harbour and Wintershall Dea amounted to 513 thousand barrels of oil equivalent per day in the first half of 2023. In 2022, the combined business had pro-forma revenue of $13.5 billion and EBITDAX of $10.3 billion. Overall, production volumes of Harbour and Wintershall Dea amounted to 526 thousand barrels of oil equivalent per day in 2022. Combined 2P reserves stood at 1.5 billion barrels of oil equivalent at the end of 2022.

BASF has appointed Morgan Stanley & Co. International plc as exclusive financial advisor as well as Freshfields Bruckhaus Deringer as legal advisor in connection with the transaction.