Mining giant BHP (ASX:BHP)
and energy giant Woodside Petroleum (ASX:WPL)
have signed a binding sales agreement for the merger of BHP's oil and gas portfolio with Woodside.
The news came after the market closed yesterday. Woodside will acquire the entire share capital of BHP Petroleum International in exchange for new Woodside shares. The signing of the agreement follows the merger commitment deed announced on August 17.
BHP said 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, said BHP.
As part of the acquisition, Woodside will own 48 per cent of the new company while BHP will own the remaining 52 per cent. Completion is targeted for the second quarter of the 2022 calendar year.
“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,” said BHP CEO Mike Henry.
“Through the merger we will provide value and choice for BHP shareholders, and unlock synergies in how these assets are managed.”
Shares in BHP (ASX:BHP)
are trading 3.8 per cent higher at $37.99, while shares in Woodside Petroleum (ASX:WPL)
are trading 3.2 per cent higher at $22.39.