Woodside (ASX:WDS) completes merger with BHP Petroleum

Highlights

• Woodside has acquired all the share capital of BHP Petroleum International Pty Ltd. 
• Woodside becomes the largest ASX-listed energy company after acquiring BHP’s oil and gas portfolio. 
• The new shares of Woodside will begin trading on the ASX on 2 June 2022. 

The shares of Woodside Energy Group Ltd (ASX:WDS) were spotted trading 0.739% lower at AU$29.540 per share at 12:12 PM AEST on the ASX today (1 June). 

The ASX-listed oil and gas developer announced the completion of the merger with BHP Group Limited’s (ASX:BHP) oil and gas portfolio to create a global energy company. 

As a result, Woodside grabbed investors’ attention today morning as more than 2.6 million shares of the company were traded within a short span of time after the market opened for trading.

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Details of the merger of Woodside and BHP’s oil and gas portfolio: 

As per the terms of the merger, Woodside has acquired 100% share capital of BHP Petroleum International Pty Ltd (BHPP) and issued 914,768,948 new shares of Woodside to BHP. BHP will be distributing these new shares to its eligible shareholders.

Meanwhile, Woodside is supposed to receive net cash of about US$1 billion, including the cash remaining in the bank accounts of BHP Petroleum prior to the completion of the merger.  

This reflects a net cash flow worth AU$1.8 billion generated by BHPP between the effective date of 1 July 2021 and completion. The remaining AU$$0.8 billion represented BHP’s entitlement to cash dividends paid by Woodside over the same period.

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However, the payment entitlements are subjected to a customary post-completion review of the merger, which might result in an adjustment.

Woodside is currently a part of the top 10 global independent energy companies by hydrocarbon production and the largest energy company listed on the ASX after the merger. As a result of the company’s diverse portfolio now, it is expected to deliver strong cash flow to sponsor its committed projects, Woodside’s participation in the energy transition and returns to shareholders.

Woodside is now expecting its new shares to begin trading on the ASX on 2 June 2022. On the other hand, the trading of Woodside American Depositary Shares on the NYSE is also expected to begin on 2 June 2022. Furthermore, the trading of Woodside shares on the Main Market for the listed securities of the LSE is expected to begin on 6 June 2022.

Also read: Explained: How are Woodside Energy shares different from that of Woodside Petroleum?

Meanwhile, Woodside has already begun activities to integrate the two organisations. Woodside’s updated guidance, cash reserve update and other relevant information will be shared soon by the board.

Meanwhile, the shares of BHP Group Limited (ASX:BHP) were spotted trading 0.739% higher at AU$44.940 per share at 12:24 PM AEST on the ASX today (1 June). The company drove investors’ attention today with a trading volume of over three million within a short period of time after ASX opened for trading.

What did the Woodside management say? 

Meg O’Neill, the CEO of Woodside, believes that the completion of the merger was one of the most important events in the history of Woodside as it marked the beginning of a new chapter for the company.

Woodside’s share price performance summary: 

The share price of Woodside has gained approximately by 35% on the ASX over the past 12 months. On the other hand, Woodside’s year-to-date share price also gained over 31% (as of 11:21 AM AEST on the ASX today, 1 June).

Read more: Woodside (ASX:WPL) sales spike as global supply shrinks