Proposals have been published outlining the process for Aker BP’s takeover of Lundin Energy, in a merger aimed at creating Norway’s second-largest oil and gas producer.
AkerBP announced it would buy Lundin Energy’s E&P business via a combination of cash and shares in December, in a deal aimed at creating “the leading European independent E&P.”
Plans published today note that Lundin has created a new Swedish listed subsidiary for the purpose of the merger – Lundin Energy MergerCo AB – which will hold all of its E&P business.
Shortly before the completion of the transaction, all shares in MergerCo will be distributed to the shareholders of Lundin Energy through a so-called Lex Asea dividend.
AkerBP will then pay a merger consideration of the equivalent of $7.76 directly to the new shareholders of MergerCo, plus 0.95098 shares in Aker BP for each of their shares in Lundin, in the form of Swedish Depository Receipts.
Lundin Energy’s senior management team will also be paid a transaction bonus of $28 million.
Lundin shareholders will hold 43% of the enlarged AkerBP, valuing the combined business at 125billion NOK (£10.5bn). It will continue to be listed on the Oslo stock exchange.
Speaking in December, Welligence vice president Dave Moseley described it as “one of the biggest deals in the North Sea this millennium.”
The new company will be the second largest oil and gas producer on the Norwegian Continental Shelf (NCS), with a combined oil and gas production of approximately 400,000 barrels of oil equivalent per day.
It will operate six major production hubs on the NCS, in addition to being the second largest owner of the giant Johan Sverdrup oil field, with further growth through participation new field development projects such as NOAKA, Wisting and Valhall NCP/King Lear, as well as continued field development activities around existing assets.
The merger is subject to approval by the shareholders of each company at their respective general meetings, currently expected to be held in March and April 2022, as well as approval from the relevant authorities.
Further information is expected to be published by Aker BP on or around 9 March 2022.
Meanwhile, Lundin Energy and its renewable energy business will not form part of the deal and the company will remain listed on Nasdaq Stockholm after the transaction.
The companies expect the deal to complete by the end of June 2022.
Aker BP last week published its full year results, recording pre-tax profits of £2.2 billion – a dramatic increase on 2020’s figure of £120m.
Net profits for 2021 were £624m, up from £33m in 2020, allowing the company to increase its dividend from 99p to £1.40.
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