Harbour Energy plc (“Harbour”) to acquire Wintershall Dea assets with LetterOne (“L1”) to remain minority shareholder in newly combined company
L1, together with BASF, has reached an agreement to transfer Wintershall Dea’s non Russia-related upstream business to London-listed Harbour, the UK's largest oil and gas producer, for a total consideration of $11.2 billion.
As a result of the transaction L1, which owns 27.3 per cent of Wintershall Dea’s shares, will receive a cash consideration and a minority shareholding in the newly combined company. L1’s shareholding will comprise 251,488,211 non-voting, non-listed convertible ordinary Harbour shares with preferential rights (Non-Voting Shares). The Non-Voting Shares provide a 13% premium on any dividends paid on each Harbour ordinary share.
The transaction will create one of the world’s largest and most geographically diverse, independent oil and gas companies, domiciled in the UK with the scale, reach and international connectivity to manage energy volatility and capitalise on the energy transition. The combination will bring together Harbour’s international portfolio, including Harbour’s assets in the UK, and all of Wintershall Dea’s upstream assets in Norway, Germany, Mexico, Argentina, Egypt, Libya, Algeria and Denmark, as well as Wintershall Dea’s CO2 Capture and Storage (CCS) licenses in Europe. Wintershall Dea’s Russian assets are not part of the transaction.
The transaction offers L1 appealing value for its minority position in Wintershall Dea while retaining an interest in a company with growth ambitions, a strong management team and shareholders aligned around the future potential for the Company.
L1’s Non-Voting Shares are convertible (on a one-for-one basis) into Harbour Ordinary Shares on the satisfaction of certain conditions, including relevant regulatory approvals. Upon full conversion of the Non-Voting Shares to voting ordinary shares, L1 would hold ownership of 14.87 per cent of the voting ordinary shares of Harbour.
Commenting on the combination, Jonathan Muir, L1’s CEO, said:
“This transaction will create a major new business well-positioned to support the energy transition and will deliver real benefits for the UK economy.
“As a minority shareholder, this is an attractive deal for L1 that will deliver a superior dividend. It is in line with our focus of building businesses that matter and creating and sustaining jobs by investing for the long-term.”
The transaction is subject to regulatory approvals. L1’s Advisors are Société Générale, Moelis, Akin and Hogan Lovells.
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About L1
L1 is an independent investor in energy, health, technology and retail. It brings a long-term perspective to investment decisions and supports a workforce of over 120,000 employees in 40 businesses in the UK, EU and US and beyond.
L1 has made swift, robust and decisive changes since following Russia's illegal invasion of Ukraine. Its sanctioned shareholders (who combined hold less than 50% of L1’s shares) - Mikhail Fridman and Petr Aven - have resigned from the company; they have no role in any of the group’s decision making and operations; their shares are frozen; they have no voting rights and no dividends will be paid to them.
A new Board has been appointed that is not accountable to Fridman and Aven.
L1 is not under any sanctions of any kind - regulators in the UK, EU and US have repeatedly confirmed L1 does not face sanctions.