Aker BP Acquires Lundin Energy’s Oil and Gas Business

Posted on 12/21/2021

Aker BP ASA signed a deal to buy the oil and gas business of Lundin Energy AB. This deal would put Aker just behind Norway state-owned Equinor ASA (formerly Statoil and StatoilHydro) in terms of offshore oil production in the North Sea. AkerBP is a pure-play oil and gas company focused on the Norwegian Continental shelf. Aker Capital AS and BP Exploration Operating Company Ltd, who in aggregate control 64.99 percent of the shares and votes in AkerBP, have irrevocably undertaken to vote in support of the Combination Proposal at the general meeting of shareholders of AkerBP.

The merged company will be the largest listed E&P company focused exclusively on the Norwegian Continental Shelf. Aker ASA, BP Exploration Operating Company Ltd, and Nemesia S.á.r.l (Nemesia) (Lundin family) will be the three main shareholders. Aker is the main shareholder in Aker BP with a 37.14% ownership, held through its wholly owned subsidiary Aker Capital AS. After the merger is completed, Aker BP will be jointly owned by Aker (21.2%), BP (15.9%), Nemesia (14.4%), and other Aker BP and Lundin Energy shareholders (48.6%). The transaction will be settled through a cash consideration of US$ 2.22 billion and a share consideration of 271.91 million new shares issued from Aker BP and distributed to the Lundin Energy AB shareholders. Total value of the merger consideration to the shareholders of the new company corresponds to circa 100.17 billion kronor (US$ 10.9 billion).

Aker, BP and Nemesia (Lundin family) have undertaken a 6-month lock-up on their Aker BP shares from closing and give irrevocable voting undertakings in favor of the merger. The enlarged Aker BP will be the operator of six major production hubs and will in addition be the second largest owner of the giant Johan Sverdrup oil field. The combined companies will pump the equivalent of about 400,000 barrels of oil a day.

Aker BP intends to finance the cash portion of merger through a bridge loan from BNP Paribas, DNB, and SEB.

Lundin Energy has engaged Barclays as financial advisor in relation to the Combination Proposal. Gernandt & Danielsson Advokatbyrå and Advokatfirmaet Schjødt are acting as legal advisors to Lundin Energy in relation to the Combination Proposal.

The deal gives the Lundin Energy family owners to get out of their oil and gas holdings and have them focus on their other efforts in copper and mining. Lundin Energy has developed a portfolio of onshore renewable assets in the Nordics, with power generation of 600 gigawatt hours per annum once fully built out. As part of this transaction Lundin Energy’s E&P businesses are being sold to and combined with AkerBP, leaving behind a standalone renewable energy business.

Kjell Inge Røkke is a Norwegian billionaire businessman who started out as a fisherman. In 1996, the Røkke controlled company RGI purchased enough shares in Aker ASA to become the company’s largest shareholder, and later merged his company RGI with Aker ASA.

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