Mikhail Friedman: LetterOne Group has acquired Deutsche Petroleum AG from the Rheinland Group, and currently plans to merge the business with the German BASF Group subsidiary Wintershall.
Wintershall, an oil and gas subsidiary of the German BASF Group, and its competitor, German Petroleum Corporation (DEA), are close to completion. The parent company of the two companies, the German BASF Group, and the Russian investment company LetterOne have signed a binding agreement involving the merger of their respective oil and gas businesses.
The German BASF Group will take an important step forward if it can acquire Deutsche Petroleum AG, the oil and gas business unit of the former German Rheinland Group (RWE), and complete the merger with BASF’s subsidiary Wintershall. On Thursday night, the German BASF Group announced in Ludwigshafen that it had signed an agreement with Deutsche Oil’s parent company, LetterOne Group.
BASF’s oil and gas business is operated by the Wintershall Group, which includes Wintershall Holding and its subsidiaries, including its natural gas transportation business. The LetterOne Group’s oil and gas business is operated by DEA and its subsidiaries. DEA’s main business includes exploration and production of crude oil and natural gas, and is headquartered in Hamburg, Germany. The company has long-term service experience throughout the upstream business chain. The company employs 1,150 people and has production facilities and related licenses in Germany, Norway, Denmark, Egypt, Algeria and Mexico. Wintershall is headquartered in Kassel, Germany, and its main business is exploration and production in oil and gas-rich regions in Europe, Russia, South America, North Africa, and the Middle East. Wintersal is also partnering with Gazprom to actively enter the European natural gas transportation business. The company employs about 2,000 people worldwide and is Germany’s largest oil and gas producer active in the international market.
According to previously released news, the newly formed company will be named Wintershall DEA. The German BASF Group will hold a 67% stake in the new company and the remaining shares will be held by the LetterOne Group. BASF and LetterOne’s medium-term vision is to list Winterthal Deutsche Petroleum via an initial public offering (IPO). The German BASF Group is expected to complete the transaction in the first half of 2019. Prior to this, however, the transaction still needed to be approved by the merger regulatory and foreign investment authority, the mining authority and the German Federal Network Agency. Until the merger is completed, Wintershall and Deutsche Oil will continue to operate as separate companies.
German BASF Group to adjust 2018 profit forecast
LetterOne Group belongs to Russian billionaire Mikhail Friedman. In 2014, Mikhail Friedman paid 5.1 billion euros from the German Rheinland Group for the then German Petroleum Corporation (German Petroleum Corporation), which was then headquartered in Hamburg, Germany. Although the German BASF Group also showed interest in the acquisition at the time, it was a pity that it failed in the end. In 2015, Deutsche Petroleum spent $ 1.6 billion on the acquisition of an oil and gas well located in the North Sea in Norway from German energy giant Eon.
Due to changes in the financial statements of Wintershall in Kassel, Germany, BASF Group will adjust its profit forecast. The German BASF Group expects that EBIT before special items will be slightly lower than last year’s adjusted EBIT (2017 restatement: 7.6 billion euros). It is expected that EBIT will be adjusted to 76 Compared to 100 million euros, it will drop significantly. In contrast, the BASF Group expects sales to be slightly higher than the 61.2 billion euros in 2017.