By OGJ editors
HOUSTON, Dec. 18 -- The boards of Norway's Statoil ASA and Norsk Hydro ASA have agreed to merge their oil and gas operations in a deal valued at about $30 billion, creating the world's largest offshore operator.
Combined production of the new company—yet to be named—will be 1.9 million b/d in 2007. The combined company's proved oil and gas reserves will be 6.3 billion boe. Hydro, meanwhile, will continue as a global aluminium company.
Hydro's shareholders will hold 32.7% of the new firm, while Statoil's shareholders will hold 67.3%. Hydro's shareholders will receive 0.8622 share in the new company for each Hydro share and continue as owners of Hydro. Statoil shareholders will maintain their holdings in the new company on a one-for-one basis. The Norwegian state will hold about 62.5% in the merged entity.
The new firm will have operations in almost 40 countries. The companies' boards propose that Eivind Reiten will become chairman of the new company, while Helge Lund is proposed as president and chief executive officer.
Following the transaction, the new company will employ 31,000 people. The companies said personnel reductions in overlapping functions are expected to be "limited and take place through internal replacement or natural turnover."
The proposed merger is subject to approval by general meetings of Statoil and Hydro and by regulatory authorities. General meetings of both companies are slated for second-quarter 2007, and final closing is expected to be in next year's third quarter.
The new firm will be based in Stavanger. Group functions will be in both Stavanger and Oslo, however, and the chief executive officer will operate out of both locations.
