The deal is expected to create the second-largest publicly-listed oil and gas producer on the Norwegian Continental shelf (NCS) with a combined production of approximately 400,000 barrels of oil equivalent per day.
Under the terms of the deal, shareholders of Lundin Energy’ E&P business will receive $2.22bn in cash, and over 271.9 million shares of Aker BP for each share held. The deal values each Lundin Energy share at about $30.53 (SEK279.3).
Lundin Energy said that the deal excludes its legal entity as well as portfolio of onshore renewable energy facilities in the Nordics.
The combined company will operate six major production hubs on the NCS and will have 31.6% stake in the giant Johan Sverdrup oil field.
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Furthermore, the company will have more than 2.7 billion barrels of oil equivalent (boe) of reserves and resources.
Lundin Energy board chair Ian Lundin said: “For Lundin Energy shareholders, this will deliver a significant cash consideration and the opportunity to be a shareholder in the leading European E&P company.
“The Lundin Family are in full support of this transaction and have given our irrevocable undertaking to vote in favour of this transaction. The independent members of the Board of Directors have also recommended that all shareholders vote in favour of this transaction.”
Aker Capital and BP Exploration Operating, which jointly own shares and votes of 64.99% in Aker BP, are supporting the deal.
Upon the completion of the transaction, Aker BP will be 21.2% owned by Aker, 15.9% by BP and 14.4% by Nemesia. Other Lundin Energy and Aker BP shareholders will own a combined stake of 48.6%.
Aker BP CEO Karl Johnny Hersvik said: “We are now creating the E&P company of the future which will offer among the lowest CO2 emissions, the lowest cost, high free cash flow and the most attractive growth pipeline in the industry, with a high dividend capacity combined with a strong Investment Grade credit rating.”
Scheduled for completion in second quarter of 2022, the transaction is subject to approvals from shareholders of Aker BP and Lundin Energy, and necessary governmental clearances.
Last month, BP and Aker have jointly divested a stake of around 5% in Aker BP, which created in 2016 following the merger of the Norwegian upstream operations of BP and Aker.
Since its launch, shares in Aker BP have recorded a fourfold increase.