BP is to press ahead with a deal that will see it become Germany's biggest petrol retailer, by restructuring the transaction to fit around regulatory objections.
The oil giant announced in July that it wanted to acquire 51 per cent of Veba Oil from E.ON, paying partly with its stake in Ruhrgas, Germany's main gas distribution business. However, the German Cartel Office subsequently blocked the Ruhrgas element of the deal.
Yesterday, BP said it would press ahead with the deal while an appeal is lodged with the German Cartel Office and, if necessary, pay for the whole acquisition in cash. It will pay $2.5bn (£1.8bn) in cash and assumed debt, for 51 per cent of Veba. It is also prepared to pay $2.4bn in cash for the remainder of Veba – dependent on a put option being exercised by E.ON from 1 April – but this is considered a formality.
BP said it had reached an agreement to sell on the upstream oil and gas production assets of Veba to Petro-Canada for $2bn. BP said that it always considered Veba's upstream assets, which are dotted around the world, to be too small and did not fit with its existing portfolio.
Acquiring Veba, which has a network of 2,600 retail sites with daily fuel sales of around 170,000 barrels, gives BP a 26.5 per cent share of the German market. BP previously had 950 petrol stations in Germany. However, regulators require BP to divest some of these new outlets to take its market position to 22.5 per cent.
Lord Browne of Madingley, BP's chief executive, said: "Whether we finance [the deal] in cash or partly from the sale of Ruhrgas, it will give BP the largest share of Europe's most important fuels market, rapidly enhance our returns and greatly improve our prospects for downstream growth."Reuse content