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Wintershall, DEA complete merger

May 05, 2019
3 min read
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Gemrany's Wintershall and DEA Deutsche Erdoel (DEA) have completed their merger and the new company, Wintershall Dea, has become leading independent gas and oil company in Europe.

The integration of Wintershall and DEA is expected to be completed in approximately one year. BASF and LetterOne expect to offer shares in Wintershall Dea through an Initial Public Offering (IPO) in the second half of 2020, subject to market conditions.

“We are a European champion and are making an important contribution to Europe’s energy security,” explained Mario Mehren, Chairman of the Board of Executive Directors and Chief Executive Officer (CEO) of Wintershall Dea. Following the approvals granted by all relevant authorities, shareholders BASF and LetterOne successfully completed the merger on May 1, 2019. The merger was agreed in September 2018.      

“Now is the right time for Wintershall and DEA to join forces so that the new company has the scale and clout to compete in today’s environment,” Mehren said. Following closing of the merger, the company will have no shareholder loans outstanding with BASF or LetterOne.

Wintershall Dea expects to realise synergies of at least €200 million per year as of the third year following the closing of the transaction, in particular from operating and capital expenditure savings. According to current plans, around 1,000 of the total 4,200 full-time positions are expected to be reduced worldwide.

“Our roots are in Germany, our home is Europe and our work is global,” summarises CEO Mario Mehren. The upstream activities of the company are supplemented by investments in natural gas infrastructure and midstream services. Together with its partners, Wintershall Dea operates a natural gas pipeline network in Germany of approximately 2,400 kilometres. The company is also a shareholder of Nord Stream AG and provides financing to Nord Stream 2 AG.

Mehren emphasised that Wintershall and DEA fit together not only in terms of their portfolio, but also in terms of their values and their team spirit. The new company is based on these shared values. “We are a reliable partner,” explains Mehren. “We are reliable in our dealings, in our expertise and in our performance.”

Moraeus Hanssen added: “Our portfolio is well balanced both regionally and operationally and 70 percent of our production is gas. And that is a good thing for Europe with a growing demand for natural gas. Europe does not need less, but more gas, in order to achieve its own climate goals.”

Wintershall Dea will initially operate as a GmbH with two corporate headquarters: Kassel and Hamburg. The company will be managed by an Executive Board consisting of five members: Mario Mehren, Chairman and Chief Executive Officer (CEO); Maria Moraeus Hanssen, Deputy CEO and Chief Operating Officer (COO), responsible for Europe and MENA; Thilo Wieland, Member of the Executive Board responsible for Russia, Latin America and Midstream; Hugo Dijkgraaf, Chief Technology Officer (CTO) and Paul Smith, Chief Financial Officer (CFO).