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Bloomberg
Centrica Plc and Stadtwerke Muenchen GmbH agreed to combine assets to set up a new European exploration and production company and may sell shares in the venture after two years. The UK’s biggest energy supplier to homes will own 69 percent of the business and the transaction is expected to close in the fourth quarter, Centrica said in a statement. The organization allows for further consolidation and joint ventures, potentially through an initial public offering in two to five years.
Centrica is seeking to create a more sustainable, European-focused E&P business after selling its Canadian natural gas unit last month and its gas assets in Trinidad and Tobago in May. The new venture will allow Centrica to benefit from the German utility’s early life-cycle assets, which will complement the London-based company’s more mature exploration business.
The potential for an IPO of the new company “will continue Centrica’s journey towards a downstream customer-focused energy and services provider,†John Musk, an analyst at RBC Europe Ltd., said in an emailed note.
The joint venture will comprise Centrica’s assets in UK, Netherlands and Norway and UK, Norway and Denmark business of Bayerngas Norge AS, a unit controlled by Stadtwerke Muenchen and Bayerngas GmbH. About two-thirds of total reserves and resources comprise natural gas, containing a mix of producing assets, development options and exploration licenses, as well as the UK onshore terminal at Barrow-in-Furness.