WINTERSHALL NEWS BASF and LetterOne sign agreement to merge Wintershall and DEA
BASF and LetterOne will create the leading independent European oil and gas company. And are envisaging to list the company through an Initial Public Offering (IPO). Wintershall DEA: success based on tradition.
BASF and LetterOne have signed a definitive transaction agreement to merge their respective oil and gas business. Wintershall and DEA Deutsche Erdöl AG will become one company: Wintershall DEA.
Wintershall DEA will form the leading independent European exploration and production company with international activities in selected core regions. Crude oil and natural gas production at Wintershall and DEA amounted pro forma to a total of 210 million barrels of oil equivalent (BOE) in 2017; that corresponds to a daily production volume of around 575,000 BOE. Through this merger, BASF and LetterOne are laying the foundation for further profitable growth. The medium-term plan is to list Wintershall DEA through an initial public offering.
Closure of the transaction is expected in the first half of 2019, subject to the approvals from the merger control and foreign investment authorities, as well as a number of mining authorities and the German Federal Network Agency. Until closing, Wintershall and DEA will continue to operate as independent companies.
Both have ambitious goals for the new company: Wintershall DEA strives for a daily oil and gas production of 750,000 to 800,000 BOE between 2021 and 2023.
Wintershall DEA would ensure that Wintershall continues on its growth trajectory as it has in previous years. In the past eleven years, Wintershall has increased its production by 50 percent, from 111 in 2006 to 164 million boe in 2017. During that time, Wintershall doubled its proven reserves (1P) to 1.7 billion boe.
Chairman of the Wintershall Board of Executive Directors
"We are confident that the merger of Wintershall and DEA will generate strategic growth and create synergies. With more self-operated projects, stable, long-term partnerships, and an optimized portfolio, Wintershall DEA will strengthen its international market position as a joint venture,” explains Wintershall’s CEO Mario Mehren.
“One thing is clear: Wintershall and DEA – two German companies with a long-standing tradition – are an excellent fit, as they complement each other in terms of strategy, business segments, and international locations. I am convinced that Wintershall DEA will establish itself as the leading traditional German company for oil and gas. And as the leading independent European oil and gas producer,” adds Mehren.
Wintershall and DEA – on course for growth
Wintershall and DEA, the two long-standing German companies that are merging, are a perfect match for each other. Wintershall, established in Kassel back in 1894, initially for mining potassium salt. DEA, founded in Nordhausen/Thuringia in 1899, as “Deutsche Tiefbohr-Actiengesellschaft” also for the mining of potash salt. In the course of their over 100-year histories, both companies have developed extremely successfully and strategically optimized their portfolios. Wintershall has been part of BASF in Ludwigshafen since 1969. BASF’s acquisition immediately made Wintershall BASF’s largest European subsidiary. From 1988 to 2015, DEA was a subsidiary of RWE, before it became part of the Luxembourg-based LetterOne in 2015. Originally, DEA also had a network of filling stations and refineries, which was taken over by Royal Dutch Shell in 2002.
From 2019, Wintershall und DEA, two companies steeped in tradition, will share a future together, making Wintershall DEA Europe’s leading independent oil and gas producer. Thanks to technical expertise, German quality standards, and intelligent project solutions, Wintershall DEA will produce oil and gas for the future.
The companies' key figures:
The BASF Group’s Oil & Gas segment generated revenue of around €3.2 billion in the 2017 business year, while EBITDA amounted to €2.1 billion, and EBIT exceeded €1 billion. DEA’s revenue was around €1.5 billion in the 2017 business year, EBITDA was around €800 million, and EBIT almost €385 million. In 2017, Wintershall produced 164 million BOE; proven reserves (1P) stood at 1.7 billion BOE at the end of 2017. DEA’s annual production was around 45 million BOE in 2017; proven reserves (1P) amounted to 508 million BOE.