In November 2021, BHP Group (BHP) and Woodside Petroleum Ltd (Woodside) signed a share sale agreement (SSA) for the merger of BHP’s oil and gas portfolio with Woodside through an all-stock merger.
Under the proposed transaction, BHP’s petroleum business will merge with Woodside, which will issue new share to BHP shareholders.
On completion, the expanded Woodside will be owned 52% by existing Woodside shareholders and 48% by BHP shareholders.
The explanatory memorandum and notice of meeting for the Woodside shareholder vote slated for May 19, 2022 have now been released by Woodside.
In addition, Woodside has produced an Independent Expert’s Report prepared for Woodside shareholders, which concludes that the Merger is in the best interests of Woodside shareholders in the absence of a conflict of interest.
According to the official media release, the Merger is on pace to be completed on June 1, 2022, subject to the satisfaction of certain conditions precedent, including the approval of Woodside shareholders.
At completion, BHP expects to receive 914.8 million newly issued Woodside Shares and will determine a fully franked in specie dividend to BHP shareholders.
For every 5.5340 BHP shares held on the Record Date, BHP shareholders are projected to receive one Woodside Share.
The indicated value of BHP Petroleum is US$23.4 billion, based on Woodside’s share price of US$25.55 on April 6, 2022.
The in specie dividend would be US$4.62 at current valuation, which is subject to fluctuate, with US$1.98 in franking credits distributed for every BHP share (US$10.0 billion in franking credits).
The merged business, Australia’s largest energy company, is expected to have a high-margin oil portfolio, long-life LNG assets, and the financial strength to assist supply the energy needed for global growth and development during the energy transition once the merger is completed.
The combined business is planned to be led by Meg O’Neill as the CEO and Managing Director.
Image credit: https://www.woodside.com.au/what-we-do/australian-growth-projects/scarborough
