The European Commission has approved the proposed sale of Denmark’s Dong Energy’s oil business to UK’s Ineos.
The European Commission, under the EU Merger Regulation, concluded that the proposed transaction would raise no competition concerns given that the companies’ activities overlap to a limited extent and that a number of alternative suppliers would remain in the market after the merger.
Under the sales and purchase agreement announced in May, Dong has agreed to divest the entire share capital of its upstream oil and gas business DONG E&P A/S to Ineos for an unconditional payment of $1.05 billion on a cash and debt free basis, a contingent payment of $150 million related to the Fredericia stabilization plant, and a contingent payment of up to $100 million subject to the development of the Rosebank field, in the UK North Sea.
Henrik Poulsen, CEO of DONG Energy, said in May: “Since the decision in 2016 to divest our upstream oil and gas business, we’ve actively worked to get the best transaction by selling the business as a whole, getting a good and fair price for it and ensuring the optimal conditions for the long-term development of the oil and gas business. With the agreement with Ineos we’ve obtained just that.”
Following the transaction DONG Energy will become a pure play renewables company with no oil and gas assets in its ownership.
At closing of the transaction, approximately 440 employees working for DONG Energy Oil & Gas will transfer to employment with the Ineos group.