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BASF (BASFY) Exits Wintershall Dea E&P Assets For $1.56B
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BASF SE (BASFY - Free Report) , LetterOne and Harbour Energy plc announced the signing of a business combination agreement, marking a significant development in the energy sector. The agreement involves the transfer of Wintershall Dea's Exploration and Production (E&P) business — comprising producing and development assets — and exploration rights in various countries to Harbour Energy plc.
As part of the deal, shareholders of Wintershall Dea — BASF (72.7%) and LetterOne (27.3%) — will receive a total cash consideration of $2.15 billion at closing. This includes $1.56 billion for BASF's share.
They will also receive new shares issued by Harbour, resulting in a total shareholding of 54.5% in the enlarged Harbour, with BASF holding 39.6%. The agreed enterprise value for the Wintershall Dea assets is $11.2 billion, incorporating outstanding bonds of nearly $4.9 billion.
This strategic move aligns with BASF's goal to exit the oil and gas business. The transaction provides an opportunity for the gradual and optimized exit from this sector over the next few years, leveraging the potential for value creation through Harbour's listing on the London Stock Exchange.
Importantly, Wintershall Dea's headquarters and its related staff are not part of the transaction. The closure of the Kassel and Hamburg headquarters, currently employing around 850 people, is anticipated, with Harbour planning to absorb some employees into the combined company. The details of this process will be determined in subsequent discussions involving employee representatives in accordance with legal regulations.
Simultaneously, the legal separation of Wintershall Dea's Russia-related business is progressing as planned. BASF and LetterOne will retain ownership of this business, which includes stakes in joint ventures in Russia and interests in Wintershall AG in Libya, Wintershall Noordzee BV in the Netherlands and Nord Stream AG.
The transaction is subject to regulatory approvals, including merger control and foreign investment authorities in multiple countries, with the closing targeted for the fourth quarter of 2024. Until then, Wintershall Dea and Harbour will continue to operate independently.
In addition to the Harbour transaction, Wintershall Dea is actively preparing for a separate sale of its stake in WIGA Transport Beteiligungs-GmbH & Co. KG, a German gas transport business not included in the Harbour deal.
In the past year, BASF’s shares have gained 8.5% compared with the industry’s 3.1% fall in the same period.
The Zacks Consensus Estimate for LEU’s current-year earnings has been revised upward by 30.5% in the past 60 days. LEU beat the Zacks Consensus Estimate in all of the last four quarters, with the average earnings surprise being 47.7%. The company’s shares have increased 67.8% in the past year.
The Zacks Consensus Estimate for HWKN’s current-year earnings has been revised upward by 1.8% in the past 60 days. HWKN beat the Zacks Consensus Estimate in each of the last four quarters. It delivered a trailing four-quarter earnings surprise of 27.5%, on average. The stock has rallied around 83.8% in a year.
The consensus estimate for Linde’s current fiscal year earnings is pegged at $14.11, indicating a year-over-year surge of 14.8%. AGI beat the Zacks Consensus Estimate in all of the last four quarters, with the average earnings surprise being 5.7%. The company’s shares have surged 25.6% in the past year.
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BASF (BASFY) Exits Wintershall Dea E&P Assets For $1.56B
BASF SE (BASFY - Free Report) , LetterOne and Harbour Energy plc announced the signing of a business combination agreement, marking a significant development in the energy sector. The agreement involves the transfer of Wintershall Dea's Exploration and Production (E&P) business — comprising producing and development assets — and exploration rights in various countries to Harbour Energy plc.
As part of the deal, shareholders of Wintershall Dea — BASF (72.7%) and LetterOne (27.3%) — will receive a total cash consideration of $2.15 billion at closing. This includes $1.56 billion for BASF's share.
They will also receive new shares issued by Harbour, resulting in a total shareholding of 54.5% in the enlarged Harbour, with BASF holding 39.6%. The agreed enterprise value for the Wintershall Dea assets is $11.2 billion, incorporating outstanding bonds of nearly $4.9 billion.
This strategic move aligns with BASF's goal to exit the oil and gas business. The transaction provides an opportunity for the gradual and optimized exit from this sector over the next few years, leveraging the potential for value creation through Harbour's listing on the London Stock Exchange.
BASF SE Price and Consensus
BASF SE price-consensus-chart | BASF SE Quote
Importantly, Wintershall Dea's headquarters and its related staff are not part of the transaction. The closure of the Kassel and Hamburg headquarters, currently employing around 850 people, is anticipated, with Harbour planning to absorb some employees into the combined company. The details of this process will be determined in subsequent discussions involving employee representatives in accordance with legal regulations.
Simultaneously, the legal separation of Wintershall Dea's Russia-related business is progressing as planned. BASF and LetterOne will retain ownership of this business, which includes stakes in joint ventures in Russia and interests in Wintershall AG in Libya, Wintershall Noordzee BV in the Netherlands and Nord Stream AG.
The transaction is subject to regulatory approvals, including merger control and foreign investment authorities in multiple countries, with the closing targeted for the fourth quarter of 2024. Until then, Wintershall Dea and Harbour will continue to operate independently.
In addition to the Harbour transaction, Wintershall Dea is actively preparing for a separate sale of its stake in WIGA Transport Beteiligungs-GmbH & Co. KG, a German gas transport business not included in the Harbour deal.
In the past year, BASF’s shares have gained 8.5% compared with the industry’s 3.1% fall in the same period.
Image Source: Zacks Investment Research
Zacks Rank & Key Picks
BASF currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the Basic Materials space are Centrus Energy Corp. (LEU - Free Report) , sporting a Zacks Rank #1 (Strong Buy), and Hawkins, Inc (HWKN - Free Report) and Linde plc (LIN - Free Report) , each carrying a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for LEU’s current-year earnings has been revised upward by 30.5% in the past 60 days. LEU beat the Zacks Consensus Estimate in all of the last four quarters, with the average earnings surprise being 47.7%. The company’s shares have increased 67.8% in the past year.
The Zacks Consensus Estimate for HWKN’s current-year earnings has been revised upward by 1.8% in the past 60 days. HWKN beat the Zacks Consensus Estimate in each of the last four quarters. It delivered a trailing four-quarter earnings surprise of 27.5%, on average. The stock has rallied around 83.8% in a year.
The consensus estimate for Linde’s current fiscal year earnings is pegged at $14.11, indicating a year-over-year surge of 14.8%. AGI beat the Zacks Consensus Estimate in all of the last four quarters, with the average earnings surprise being 5.7%. The company’s shares have surged 25.6% in the past year.