North Africa Focus For German $15bn Upstream Tie-Up

German chemical giant BASF is in talks with Russian investment vehicle LetterOne to combine their respective German-headquartered oil and gas businesses, Wintershall and DEA.

“BASF Group is in discussions with LetterOne regarding a potential merger of the BASF Group’s oil and gas activities with LetterOne’s oil and gas activities, which comprise the DEA Group,” the latter said on 24 November. BASF adds that it “would hold the majority of the shares in the joint enterprise… An Initial Public Offering (IPO) would be an option in the medium term.”

Wintershall’s 2016 earnings were €2.8bn, double the Dea figure. The BASF upstream arm’s global net output was 131,000 b/d of oil and around 1.8bn cfd of gas, both more than double those for DEA (see table). These numbers suggest BASF would take at least 2/3 of the merged entity which various sources canvassed by Bloomberg and German business daily Handlesblatt value at a potential $12-16bn.


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