BASF: cuts outlook after joint venture agreement
(CercleFinance.com) - German chemical giant BASF lowered its full-year profit guidance late on Thursday, citing the impact of a joint venture agreement in the oil and gas sector.
The company said it now expects a slight decline in EBIT before special items compared to the adjusted 2017 figure, while EBIT is expected to decline "considerably" compared to the adjusted figure of the previous year.
Yesterday BASF and Luxembourg-based investment business LetterOne signed a definitive transaction agreement to merge their German oil and gas businesses in a joint venture, which will operate under the name Wintershall DEA.
The total hydrocarbon production of Wintershall and DEA is estimated to be 210 million barrels of oil equivalent per year, meaning a production of around 575,000 barrels a day.
The transaction is expected to be closed in the first half of 2019.
Through the merger, synergies of at least 200 million euros per year are expected as of the third year after the transaction is closed.
Over the medium term, BASF and LetterOne intend to list Wintershall DEA through an initial public offering (IPO), they said.
The shares of BASF were down 2.2% in Frankfurt on Friday morning.
Copyright (c) 2018 CercleFinance.com. All rights reserved.
The company said it now expects a slight decline in EBIT before special items compared to the adjusted 2017 figure, while EBIT is expected to decline "considerably" compared to the adjusted figure of the previous year.
Yesterday BASF and Luxembourg-based investment business LetterOne signed a definitive transaction agreement to merge their German oil and gas businesses in a joint venture, which will operate under the name Wintershall DEA.
The total hydrocarbon production of Wintershall and DEA is estimated to be 210 million barrels of oil equivalent per year, meaning a production of around 575,000 barrels a day.
The transaction is expected to be closed in the first half of 2019.
Through the merger, synergies of at least 200 million euros per year are expected as of the third year after the transaction is closed.
Over the medium term, BASF and LetterOne intend to list Wintershall DEA through an initial public offering (IPO), they said.
The shares of BASF were down 2.2% in Frankfurt on Friday morning.
Copyright (c) 2018 CercleFinance.com. All rights reserved.