BHP Group (BHP) and Woodside Petroleum have yesterday signed a binding share sale agreement (SSA) for the merger of BHP’s oil and gas portfolio with Woodside (Merger). Woodside will acquire the entire share capital of BHP Petroleum International in exchange for new Woodside shares.
The signing of the SSA follows the merger commitment deed announced on 17 August 2021.
On completion, the Merger will create a global top 10 independent energy company by production and the largest energy company listed on the ASX. The combined company will have a high margin oil portfolio, long life LNG assets and the financial resilience to help supply the energy needed for global growth and development over the energy transition.
BHP CEO Mike Henry said BHP’s petroleum business and Woodside are better together and will create value for BHP shareholders.
“Merging our petroleum business with Woodside creates a large, more resilient company, better able to navigate the energy transition and grow value while doing so,” he said.
An alternative option carefully considered by the Board was to implement a demerger through a distribution to shareholders of shares in a newly listed entity. However, while a demerger would result in a strong and financially viable stand-alone entity, the Board determined that the Merger was the best alternative for shareholders given that it would capture the additional value flowing from the advantages and benefits outlined above.
Completion is targeted for the second quarter of the 2022 calendar year. Prior to completion, BHP and Woodside will carry on their respective businesses in the normal course and, will put in place appropriate plans to enable a smooth transition of ownership.
BHP has agreed to exclusivity arrangements with Woodside. These arrangements do not restrict BHP from considering superior proposals for BHP Petroleum in prescribed circumstances. Woodside has agreed to similar exclusivity arrangements in connection with a competing proposal for Woodside.