BASF SE – a renowned German chemical company has reportedly announced that it has entered into a definitive agreement with LetterOne to merge Wintershall and DEA, their respective oil & gas businesses, in a joint venture (JV). The companies revealed that the JV would be operating under the name Wintershall DEA.
Reliable sources confirmed that the transaction is anticipated to reach completion within the first half of 2019. The JV would be subject to approvals from the German Federal Network Agency, the mining authority as well as the merger control and foreign investment authorities.
According to an official press release, the two companies will commence with the process of pursuing regulatory approvals imminently. The process is expected to take over six months to reach conclusion until which, Wintershall and DEA would continue to operate as two independent companies.
CFO and the Vice Chairman of the Board of Executive Directors, BASF SE, Dr. Hans-Ulrich Engel stated that with Wintershall DEA, the company would be creating a leading European production and exploration company which will boast of international operations in key regions. Dr. Engel added that by merging into one, the two companies are laying down the foundation for further possible growth.
For the record, in 2017 the combined business of DEA and Wintershall had achieved por-forma sales of over €4.7 billion with income from operations prior to depreciation and amortization reaching to €2.8 billion and the net income of €740 million.
Reportedly, the CEO of Wintershall, Mario Mehren has been nominated to be the CEO and Chairman of the Management Board of Wintershall DEA. Meanwhile, CEO of DEA, Maria Moraeus Hanssen has been nominated to take on the duties of the deputy CEO and COO of the JV whereas the CFO for this company would be nominated later.
The merged Wintershall DEA would be headquartered in Hamburg and Kassel. Initially BASF would be holding 67% of Wintershall DEA’s ordinary shares while LetterOne would own the remaining 33% of shares.