BP purchase gives company major stake in German fuels market
Petroleum News Alaska
BP is taking a 51 percent share in Veba Oil in exchange for its stake in Ruhrgas, a move which the company says could propel it to first place in the German fuels market and fundamentally transform its downstream position in central Europe. Veba owns Aral, Germany’s biggest fuels retailer.
Subject to regulatory approvals, the deal — in the form of a joint venture between BP and Veba Oil’s owner E.ON — involves BP taking 51 percent and operational control of Veba Oil and offers the prospect of full ownership as early as the second quarter of next year.
In return, E.ON will receive 51 percent of Gelsenberg — which holds BP’s 25.5 percent stake in Ruhrgas, Germany’s leading gas distributor — plus a balancing cash payment of $1.63 billion, subject to adjustments, and an assumption by BP of $950 million of debt. Terms have also been agreed which could result in BP transferring its remaining Ruhrgas stake and paying a further $340 million for the remainder of Veba Oil.
BP chief executive Sir John Browne said: “E.ON’s wish to deepen its gas interests and exit downstream oil has presented BP with a unique opportunity to realize two strategic aims — achieve market leadership at the heart of Europe and realize excellent value for our stake in Ruhrgas.
“We’ve been very successful in the past three years at building big, efficient downstream positions in key world markets, but our buyout of Mobil gave us no significant assets in Germany. This transaction has the potential to transform that position at a stroke, giving us the leading, most efficient fuels business in the world’s third largest economy.”
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