• 5 minutes Desperate Call or... Erdogan Says Turkey Will Boycott U.S. Electronics
  • 11 minutes Saudi Fund Wants to Take Tesla Private?
  • 17 minutes Starvation, horror in Venezuela
  • 2 mins WTI @ 67.50, charts show $62.50 next
  • 9 hours Newspaper Editorials Across U.S. Rebuke Trump For Attacks On Press
  • 10 hours Mike Shellman's musings on "Cartoon of the Week"
  • 5 hours Permian already crested the productivity bell curve - downward now to Tier 2 geological locations
  • 15 hours Venezuela set to raise gasoline prices to international levels.
  • 5 hours WTI @ 69.33 headed for $70s - $80s end of August
  • 9 hours Batteries Could Be a Small Dotcom-Style Bubble
  • 15 hours Scottish Battery ‘Breakthrough’ Could Charge Electric Cars In Seconds
  • 22 hours Renewable Energy Could "Effectively Be Free" by 2030
  • 21 hours Corporations Are Buying More Renewables Than Ever
  • 10 hours Don't Expect Too Much: Despite a Soaring Economy, America's Annual Pay Increase Isn't Budging
  • 1 day Again Google: Brazil May Probe Google Over Its Cell Phone System
  • 12 hours France Will Close All Coal Fired Power Stations By 2021

Wintershall And LetterOne In Talks For $12B Oil, Gas Merger

Oil

Germany’s chemicals company BASF said on Friday that it was in talks to potentially merge its oil and gas business, Wintershall Group, with the oil and gas operations of the LetterOne holding group, owned by Russian billionaire Mikhail Fridman.  

If talks are successful and the parties reach an agreement, BASF would hold the majority of the shares in the joint enterprise, while LetterOne’s oil and gas business DEA Group will hold the remainder.

Launching an Initial Public Offering (IPO) of the joint enterprise would be an option in the medium term, BASF said, but noted that discussions were ongoing and there was no certainty that the parties would reach a deal on a transaction.

Talks between Wintershall and Fridman’s DEA Group are at an advanced stage, and the resulting company could be valued at more than $11.856 billion (10 billion euro), people familiar with the talks told Bloomberg.

Wintershall—which operates in exploration and production in oil and gas-rich regions in Europe, North Africa, Russia, South America, and the Middle East and in transport of natural gas in Europe—generated net sales of some $3.32 billion (2.8 billion euro), and earnings before interest and tax (EBIT) of $593 million (500 million euro).

Patrick Lambert at brokerage Raymond James values Wintershall at some $11.86 billion-14.23 billion (10-12 billion euro).

Related: Tesla Completes World’s Largest Battery

“BASF’s exposure to oil and gas has failed to deliver the expected hedge for its chemical’s portfolio, and has led to increased volatility in terms of its cash flow generation,” Lambert told Reuters.  

Via LetterOne, Russian tycoon Fridman bought DEA from Germany’s RWE in 2015 at an enterprise value of $6.05 billion (5.1 billion euro).

Fridman—who has made his fortune in oil, banking, and telecoms—has a net worth of $15 billion. He is on the 75th place on Forbes 2017 World’s Billionaires list and #7 among the wealthiest Russian businessmen.   

By Tsvetana Paraskova for Oilprice.com

More Top Reads From Oilprice.com:



Join the discussion | Back to homepage

Leave a comment
  • John on November 30 2017 said:
    Despite the sanctions, European companies should accept this agreement. Resources of russia allow at low prices to supply high-quality fuel and energy resources. The crisis in the countries of the Western world has led to the fact that no one wants to cooperate with the United States and expensive shale oil. The right decision always lies on the surface and the European community of the oil industry realizes that further inaction in this direction will only aggravate the current state of affairs.

Leave a comment

Oilprice - The No. 1 Source for Oil & Energy News