Page 4 - AsianOil Week 20 2022

AsianOil COMMENTARY AsianOil

Woodside shareholders back

merger with BHP’s oil and gas unit

Shareholders in Australia’s Woodside Energy have approved the company’s

merger with BHP’s oil and gas business, but the combined firm will now come

under increased pressure over emissions

INVESTMENT WOODSIDE Energy shareholders have BHP’s strategy of moving away from fossil fuels.
approved the company’s proposed merger with At the time, the deal was estimated to be worth
WHAT: miner BHP’s oil and gas business. At Woodside’s AUD63bn ($44bn).
Woodside shareholders annual general meeting (AGM) on May 19, At the time, the companies talked up the
have approved the shareholders voted 98.66% in favour of the greater scale and diversity of geographies, prod-
company’s proposed merger, paving the way for the transaction – ucts and end markets that the merger would
merger with BHP’s oil which was agreed in November – to close. result in for the combined company. They cited
and gas business. The merger, which is now expected to be a long-life, conventional portfolio and estimated
completed on June 1, will create a top 10 global synergies of more than $400mn per year, which
WHY: independent oil and gas producer by output Woodside later said it expects to realise by early
The combination comes and the largest energy company to be listed on 2024. However, integrating the two companies
as BHP moves away the Australian Securities Exchange (ASX). The will also result in a one-off cost of $600mn over
from fossil fuels and will combined company will also face additional the first two years following the combination.
create a top 10 global pressure to decarbonise – not only by virtue of Under the zero-premium deal, BHP share-
independent producer. its size, but also because 48.97% of Woodside holders will own a 48% in the combined
shareholders voted against its climate report. company.
WHAT NEXT: That result, with opposition coming from envi- A report commissioned by accounting firm
The combined company ronmental and activist shareholder groups and KPMG and released to its shareholders last
will face additional proxy adviser CGI Glass Lewis, stands in stark month highlighted the strength of the combined
pressure to do more on contrast to the overwhelming backing for the balance sheet, saying the combined company’s
decarbonisation. merger with BHP’s oil and gas business. gearing would fall to around 8%, compared with
Woodside’s target gearing of 15-35%, as a result
Major merger of the BHP assets being acquired debt-free.
Woodside and BHP agreed to the merger in KPMG also said the BHP assets would pro-
November 2021, with the decision in line with vide Woodside with “immediate access to

Woodside’s CEO, Meg
O’Neill, has thus far
pushed back against
a Scope 3 emissions
target for the company.

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