BP, Det Norske To Jointly Form Largest Norwegian Producer
Zacks Investment Research | Jun 12, 2016 09:36PM ET
Oil giant BP plc (LON:BP) (NYSE:BP) and Det norske oljeselskap along with the latter’s shareholder Aker ASA will form the largest Norwegian independent oil and gas producer.
The new entity, to be renamed Aker BP ASA, will combine the assets as well as expertise of both the companies’ Norwegian exploration and production operations. Per the terms of the proposed transaction, Aker BP will be operated independently. It will also be listed on the Oslo Stock Exchange.
Shareholders of Aker BP will be current Det norske stakeholder Aker, other Det norske shareholders and BP, with 40%, 30% and 30%, respectively. BP is also entitled to collect a cash payment of $140 million and positive working capital adjustments as part of the transaction.
Subject to customary closing conditions, regulatory review and approval by Det norske shareholders, the transaction is scheduled to be completed by the end of 2016. On completion of the transaction, BP’s Norway’s unit workforce of about 850 employees will be transferred to the combined organization.
The combination of the Norwegian asset portfolios of the two energy behemoths, will prove to be immensely beneficial for Aker BP. The new entity will gain from the combined strength of Det norske’s efficient, streamlined operating model and BP’s extensive experience in Norwegian offshore operations, asset knowledge, technical expertise and international exposure.
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