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BHP completes Woodside merger

Woodside Petroleum’s shareholders last month voted for a merger with BHP Petroleum International to create a top 10 global independent oil and gas producer worth $40 billion (R623bn), according to a vote count at the company’s annual meeting.

Woodside Petroleum’s shareholders last month voted for a merger with BHP Petroleum International to create a top 10 global independent oil and gas producer worth $40 billion (R623bn), according to a vote count at the company’s annual meeting.

Published Jun 2, 2022

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JSE-LISTED BHP Group said yesterday it had completed its merger of its petroleum arm with Australian-based Woodside Energy as it moves away from fossil fuels and decarbonises its footprint.

The merger was agreed last August, followed by the signing of a binding share sale agreement in November 2021.

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Woodside Petroleum’s shareholders last month voted for a merger with BHP Petroleum International to create a top 10 global independent oil and gas producer worth $40 billion (R623bn), according to a vote count at the company’s annual meeting.

In the transaction, Woodside acquired the entire share capital of BHP and issued 914.8 million new Woodside shares to BHP, which BHP has distributed to its eligible shareholders.

“As a result, BHP has now distributed Woodside shares to eligible BHP shareholders. BHP dividend statements and Woodside holding statements are expected to be despatched to eligible BHP shareholders in mid-June 2022,” BHP said in a statement yesterday.

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BHP chief executive Mike Henry said: “The merger of our petroleum assets with Woodside creates a global energy company with the scale and opportunity to help supply the energy needed for global growth and development in a rapidly decarbonising world.

“Our shareholders will now have exposure to assets in two organisations, BHP and Woodside, each with a very clear focus, strategy and value proposition.

“BHP’s world-class portfolio is weighted towards commodities that support economic growth and have decarbonisation upside and, combined with our operational excellence, will underpin attractive returns and long-term value growth,” he said.

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According to Australian multinational mining, metals and petroleum company BHP, the closing price of Woodside shares on the Australian Stock Exchange (ASX) on May 31 was A$29.76 (R332).

The new Woodside shares are expected to start trading on the ASX today.

As part of the completion of the merger, BHP made a net cash payment of $0.7 billion to Woodside. In addition, $0.3bn in cash would be left in the BHP Petroleum bank accounts to fund the ongoing operations, it said.

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“This reflects the net cash flows generated by BHP Petroleum, less cash dividends paid by Woodside to BHP, between the merger effective date of July, 1 2021 and completion,” BHP said

This net payment to Woodside would be subject to a customary post-completion review, which might result in an adjustment to the amount paid, the company said.

Woodside chief executive Meg O’Neill said: “Woodside begins its journey as a global company, becoming a bigger supplier of the energy that the world needs right now and will continue to demand in the future.

“The merger delivers a diverse portfolio of quality operating assets, plus a suite of growth opportunities across oil, gas, and new energy that promises ongoing value for our shareholders.”

O’Neill said the company believed that the completion of the merger would enable Woodside to play a more significant role in the energy transition.

“The merger combines the best of our two organisations, providing the leadership and technical expertise necessary to help Woodside thrive in a dynamic and competitive industry,” she said.

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