BFFAF - BASF: The Wintershall Dea Divestment - An Inevitable Step To Raise Cash
2024-01-22 16:40:51 ET
Summary
- At the end of last year, BASF announced an agreement about the divestiture of Wintershall Dea.
- The company seems determined not to cut its dividend which is a whopping 7.8%.
- BASF has to cope with high energy costs in Europe and fund significant investments, and a new CEO is about to take over.
- The increasing dependency on China makes me cautious.
Shortly before Christmas, BASF SE ( BASFY )( BFFAF ) announced that the shareholders of Wintershall Dea had come to an agreement with Harbour Energy plc ( PMOIF ) to transfer the jointly owned E&P business. Besides BASF which holds a 72.7% majority stake in Wintershall Dea, LetterOne (controlled by Russian oligarchs) is the second owner with a 27.3% share. Under the agreement, BASF will obtain a cash consideration of $1.56B and new shares issued by Harbour Energy equating to a total ownership of 39.6% in the company. Wintershall Dea's Russian activities are not part of the agreement (I will come back to that later) but will be kept by their current owners. The deal values the transferred assets at $11.2B, including Wintershall Dea's net debt of approximately €2.4B ($2.6B) at the end of 3Q23 ....
BASF: The Wintershall Dea Divestment - An Inevitable Step To Raise Cash