Harbour Energy strikes $11.2bn deal to acquire Wintershall Dea’s upstream assets

Harbour Energy has announced its agreement with BASF and LetterOne, shareholders of Wintershall Dea AG (“Wintershall Dea”), for the acquisition of a substantial portion of Wintershall Dea’s upstream assets, valued at $11.2 billion. This acquisition includes Wintershall Dea’s upstream assets in various countries, excluding its Russian assets, and marks a significant stride in Harbour’s journey to become one of the world’s largest independent oil and gas companies.

Geographic Diversification and Enhanced Production

The Target Portfolio comprises Wintershall Dea’s upstream assets in Norway, Germany, Denmark, Argentina, Mexico, Egypt, Libya, and Algeria, along with the company’s CO2 Capture and Storage (“CCS”) licenses in Europe. This acquisition is poised to transform Harbour’s scale and geographic diversification, materially enhancing production, reserve life, and margins. It will notably increase Harbour’s exposure to natural gas, aligning with the global push towards lowering emissions intensity.

Harbour Energy Announces Landmark $11.2 Billion Acquisition of Wintershall Dea’s Assets to Transform Global Oil and Gas Landscape

Financial Synergies and Accretive Growth

The acquisition is immediately accretive to Harbour’s free cash flow and is expected to deliver significant financial synergies. The porting of existing euro-denominated Wintershall Dea bonds, valued at approximately $4.9 billion, will reduce Harbour’s cost of financing. This strategic move is set to bolster enhanced and sustainable shareholder returns.

Strategic Alignment with M&A Objectives

The Board of Directors of Harbour views this acquisition as a strong strategic fit, aligning with its stated M&A objectives. It offers a transformational value-creating opportunity, significantly increasing Harbour’s production, reserve life, and margins. The acquisition supports Harbour’s goals in the energy transition sector, particularly in reducing greenhouse gas (GHG) emissions and expanding European CCS projects.

Enhancing Harbour’s Financial Strength

Harbour expects to receive investment-grade credit ratings post-acquisition, reflecting its financial stability and growth prospects. The acquisition will also increase per-share free cash flow, supporting an enhanced shareholder returns framework.

Consideration Structure and Shareholder Impact

Under the terms of the business combination agreement, Harbour will acquire the Target Portfolio for $11.2 billion, comprising the porting of Wintershall Dea Bonds, the issuance of new Harbour shares, and a cash consideration. This will result in a substantial change in the shareholding structure, with BASF owning a significant percentage of Harbour’s ordinary shares.

Forward-Looking Statements by Leadership

Linda Z Cook, CEO of Harbour, emphasized the acquisition’s role in transforming the company into a global independent oil and gas entity. She highlighted the advancements in GHG emissions reduction and CCS interests. Alexander Krane, CFO of Harbour, commented on the improved capital structure and prospects for additional shareholder returns.

Conclusion: A New Era in Oil and Gas Industry

Harbour’s acquisition of Wintershall Dea’s assets marks a new era in the global oil and gas industry. It signifies a substantial step in diversifying Harbour’s portfolio, enhancing its global presence, and contributing to the energy transition movement. This strategic decision positions Harbour for continued growth and success in the evolving energy landscape.