BP today announced that it has agreed with E.ON to go ahead with its plan to acquire a majority stake in Veba Oil on February 1. The two companies separately said they have agreed in principle to sell Veba's oil and gas production subsidiary to Petro-Canada for $2 billion.
BP will pay E.ON $1.63 billion in cash and assume some $850 million of debt in return for 51% and operational control of Veba Oil which owns Aral, Germany's biggest fuel retailer. From the sale of Veba's upstream oil and gas assets to Petro-Canada, BP would receive some $1.65 billion, with the balance going to E.ON.
BP additionally said it would be prepared to pay a further $2.4 billion in cash for the remaining 49% of Veba Oil, which E.ON can require it to buy on April 1 this year under the terms of an agreement between the two companies announced in July 2001.
The agreement envisaged part of the payment for Veba Oil being met by the sale to E.ON of BP's wholly-owned subsidiary Gelsenberg which holds a 25.5% stake in Germany's largest gas distributor, Ruhrgas. Although that sale was prohibited by Germany's Federal Cartel Office, it is being appealed to the German Economics Ministry which is expected to rule early this summer.