Australia-based Woodside Energy's all-stock merger with BHP's oil and gas business was completed Wednesday.
Woodside has acquired the entire share capital of BHP Petroleum International Pty Ltd (BHPP) and issued 914,768,948 new Woodside shares to BHP, which BHP has distributed to its eligible shareholders.
"BHP has paid the in specie dividend and distributed Woodside shares today in line with the details described in BHP’s announcement on 20 May 2022. 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.
According to BHP, the closing price of Woodside shares on ASX on 31 May 2022 was A$29.76, and the implied value of the in specie dividend was, therefore, A$27.2 billion (US$19.6 billion). At this valuation, the in specie dividend is approximately A$5.38 (US$3.86), with A$2.30 (US$1.66) of franking credits being distributed, per BHP share.
Woodside will receive net cash of approximately US$1 billion, which includes the cash remaining in the BHPP bank accounts immediately prior to completion. This reflects $1.8 billion of net cash flows generated by BHPP between the effective date of July 1, 2021 and completion, less $0.8 billion representing BHP’s entitlement to cash dividends paid by Woodside over the same period.
BHP Chief Executive Officer, 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 decarbonizing world.
"Our shareholders will now have exposure to assets in two organizations, BHP and Woodside, each with a very clear focus, strategy and value proposition. BHP’s world-class portfolio is weighted towards commodities which support economic growth and have decarbonization upside and combined with our operational excellence will underpin attractive returns and long-term value growth.”
Woodside said that, with the merger completed, the company has become a top 10 global independent energy company by hydrocarbon production and the largest energy company listed on the ASX.
"The larger, more diversified portfolio is expected to deliver significant cash flow to help fund committed projects, Woodside’s participation in the energy transition, and shareholder returns," Woodside said.
Woodside CEO Meg O’Neill said the completion of the merger was one of the most significant events in Woodside’s 67-year history and marked the start of a new chapter for the company.
"Today, 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. “We believe the completion of the merger will enable Woodside to play a more significant role in the energy transition that is imperative as we respond to climate change while ensuring reliable and affordable supplies of energy to a growing and aspirational global population.
"The merger combines the best of our two organizations, providing the leadership and technical expertise necessary to help Woodside thrive in a dynamic and competitive industry.
"We are focused on unlocking pre-tax annual synergies of more than $400 million as we merge the two businesses. It is exciting to welcome the BHP Petroleum team to Woodside Energy and start delivering on our shared vision for the future,” she said.