Woodside has confirmed it will merge with the company behind one of the world’s top producers of commodities, BHP.
BHP is merging its petroleum assets with Woodside following Woodside Chairman Richard Goyder saying the merger will “create a larger more resilient company with the financial strength to fund growth and thrive through the energy transition”.
“The Woodside board believes this is the right decision for shareholders as it brings together our complimentary assets and capabilities, which will provide a strong base to deliver enduring shareholder returns,” said Goyder.
This Merger will create the largest energy company listed on the ASX, with a market capital of approximately $41 billion.
At Woodside’s annual general meeting in Perth recently, 98.6 per cent of the votes submitted were in favour of the merger. Shareholders also backed a name change, changing Woodside Petroleum to Woodside Energy Group.
BHP will transfer 100 per cent of the issued capital of BHP Petroleum on a cash and debt-free basis, with BHP shareholders holding 48 per cent of the issued capital in the post-merger Woodside.
BHP will make a cash payment to Woodside for the net cash flow generated by BHP Petroleum between the effective date and completion of the merger. It has agreed to certain exclusivity arrangements with Woodside; however, these arrangements do not restrict BHP from considering proposals for BHP Petroleum in other circumstances.
Woodside has agreed to similar exclusivity arrangements in connection with any competing proposal for Woodside.
The new CEO and managing director of Woodside Meg O’Neill said “the enlarged portfolio delivers the cash flow and resilience to fund our evolution through the transition. Investing in the right new energy opportunities, in support of our aspiration, to be net zero by 2050”.
“This means we are extending our carbon reduction commitments to the complete portfolio. Our targets of 15 per cent emission reductions by 2025 and 30 per cent by 2030, will now apply across the combined portfolio,” she said.
Woodside expects completion of the merger to occur on 1 June 2022 and Woodside shares for BHP shareholders are expected to commence trading on the ASX on 2 June 2022.