The EC has cleared the merger, saying that it does not lead to any competition concerns.
Its conclusion was based on the fact that Ineos is a player in the petrochemicals, speciality chemicals and oil products sector with limited activities in the upstream oil and gas industries. Dong E&P on the other hand is involved in the hydrocarbon exploration and production.
Its statement regarding the transaction read: “The Commission concluded that the proposed transaction would raise no competition concerns given that the companies' activities overlap to a limited extent and that a number of alternative suppliers would remain in the market after the merger.”
The definitive agreement between Ineos and Dong was signed in late May with the acquisition expected to close within the third quarter subject to the remaining approvals and conditions.
For the Denmark-based Dong, the divestiture of its exploration and production business would transform it into a pure play renewables company.
For Ineos, the acquisition is expected to place it among the top operators in the North Sea. Its consolidated assets had a 2016 production of 100,000 barrels of oil equivalent per day (boepd).
The assets to be acquired by Ineos include 50 licences in Norway, the UK and Denmark. Dong’s production in the assets in 2016 had predominantly come from the Norwegian fields, making up 70% while the UK West of Shetland and Danish fields contributed 15% each.
Post merger, Dong’s 440 employees in its E&P division will be absorbed in Ineos. The divested Dong E&P would be operating under the Ineos Upstream division once the deal gets closed.
Image source: Ineos acquisition of Dong E&P gets EC approval. Photo: courtesy of INEOS.
