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Norwegian oil firm Aker BP has signed a merger plan, with Sweden-based Lundin Energy, that would create Norway’s second largest oil and gas producer.

The merger plan follows the signing of an agreement between the two companies in December 2021.

As per the agreement, Aker BP agreed to buy Lundin Energy’s exploration and production (E&P) business via a combination of cash and shares, worth approximately $13.95bn (Nkr125bn).

Lundin said it has created a new Swedish listed subsidiary, Lundin Energy MergerCo AB, for the purpose of this merger.

The new subsidiary will hold all of Lundin’s E&P business at the time of the merger completion.

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By GlobalData

Prior to the completion of the deal, MergerCo’s shares will be distributed to the Lundin Energy shareholders through a so-called Lex Asea dividend.

New shareholders of MergerCo will receive merger considerations equivalent to $7.76, from AkerBP.

The new shareholders will also receive 0.95098 in shares in Aker BP for each share held in Lundin. This will be implemented in the form of Swedish depository receipts.

The merger is subject to approval from the shareholders of each company at their respective general meetings, and approval from the relevant authorities.

The transaction is planned for completion in the second quarter of 2022.

The combined company will have oil and gas production rates of approximately 400,000 barrels of oil equivalent per day.

Operating six major production hubs on the Norwegian continental shelf (NCS), the combined company will be the one of the largest owner of the Johan Sverdrup oil field, offshore Norway.

In a press statement, Aker BP said: “The combined company will be uniquely positioned for profitable growth through participation in major new field development projects, like NOAKA, Wisting, and Valhall NCP/King Lear, as well as continued field development activities around the company’s existing assets.”

Upon the completion of the merger, the combined company’s shares will be listed on the Oslo BørsStock exchange, in Norway.