BASF Takes Bold Steps in Transforming Its Business Model

BASF Accelerates Strategic Business Moves

BASF is advancing significantly in the separation from Wintershall Dea quicker than anticipated. On September 3, the exploration and production business of Wintershall Dea, exempting Russian-related activities, was transferred to the London-listed company Harbour Energy. Initially, this acquisition was intended for completion in the fourth quarter.

Key Financial Implications

As per BASF's announcement, stakeholders in Wintershall Dea, including BASF and Letter One, will receive $2.15 billion along with a 54.5% stake in Harbour. For BASF, which holds a 72.7% stake, this equates to $1.56 billion and a 39.6% interest in Harbour.

Long-Term Strategic Outlook

This transaction represents another crucial step for BASF in distancing itself from its fossil fuel legacy, with much more to follow. The Russian-related activities will be channeled into a newly established GmbH, with future implications for the assets in Russia still unclear. BASF has stated that “significant federal guarantees” exist, though the exact amounts remain undisclosed.

Completing this transaction positions BASF advantageously to monetize its Harbour stake expediently, with BASF CFO Dirk Elvermann noting that “the stake in Harbour Energy presents substantial value growth potential, enabling BASF to optimize its gradual exit from our financial involvement in the company” in a press release. Previous plans for an IPO of Wintershall Dea were delayed until ultimately scrapped due to Russia's aggression against Ukraine in February 2022.