Mining giant BHP Group has agreed to merge its petroleum business with Woodside Petroleum Ltd. to create a major independent energy firm, the company announced in a statement.
- The agreement entails that both parties will combine their respective oil and gas portfolios through an all-stock merger. Woodside shareholders would own 52% and BHP shareholders 48% in the firm post-transaction.
- The merger is expected to establish an independent energy company that would be among the top 10 across the globe in terms of production. It would also be the biggest energy firm listed on the Australian Stock Exchange.
- The combined business is likely to deliver synergies over $400 million yearly, with a high margin oil portfolio, long-life liquefied natural gas assets, and financial resilience to sustain the energy needed for global growth and development amid the transition.
- BHP profits climbed 80% to $25.906 billion in the first half, with attributable profit up 42% to $11.304 billion and basic earnings per share up 42% to $223.5. The company also announced a record final dividend of $2.00 per share.
BHP Chair Ken MacKenzie said the merger will maximize the value of the oil and gas assets and will make the group simpler and more efficient. BHP is down 5.70%, while WPL is down 2.12%.