|The new company will be the world’s largest offshore operator. Click to enlarge.|
The Boards of Directors of Norwegian companies Hydro and Statoil have agreed to recommend to their shareholders a merger of Hydro’s oil and gas activities with Statoil, thereby creating the world's largest offshore operator.
The resulting new company will have a combined production of 1.9 million barrels per day in 2007 and proven oil and gas reserves of 6.3 billion barrels of oil equivalents. Hydro will continue as the world’s third-largest integrated aluminium company. Hydro’s hydropower and solar activities will also remain with Hydro.
By combining forces, the new company will be a highly competent and financially strong Norwegian-based energy champion, well positioned to ensure continued domestic excellence and pursue international business opportunities for long-term growth. The industry faces an increasingly challenging international landscape. To merge now makes perfect sense.—Jan Reinås and Jannik Lindbæk, Chairmen of the Board of Directors of Hydro and Statoil, respectively
Hydro’s shareholders will hold 32.7% and Statoil’s shareholders will hold 67.3% of the new company. Hydro’s shareholders will receive 0.8622 shares 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 approximately 62.5% in the merged entity.
The proposed merger is subject to approval by the general meetings of the two companies as well as by regulatory authorities. The general meetings are expected to be held during second quarter 2007. Final closing is expected to be in the third quarter 2007. In the meantime, Hydro and Statoil will be managed as separate companies.
A new name for the merged company will be selected as part of the integration process.