Proposition to the Storting

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The Norwegian government has today presented a proposition to the Storting (parliament) regarding the merger between Statoil and Hydro’s petroleum business. The proposition outlines key issues related to ownership and the impact of the merger on the Norwegian oil and gas activity.

In the proposition, the government recommends that it be mandated to vote at the extraordinary general meetings of Statoil and Norsk Hydro in favour of the motion from the respective boards of directors to merge Statoil and Hydro’s petroleum business.

- The government considers this merger to be strategically and industrially sound, says Odd Roger Enoksen, the Norwegian Minister of Petroleum and Energy. - Statoil and Hydro will jointly be able to create greater value than the two companies could have done separately.

The government believes that the proposed StatoilHydro name conserves the traditions of the two merged companies in a good way and supports it. The merged company’s board will submit proposals for a new name and logo at a general meeting of StatoilHydro in 2008. The government will take a position on a proposal for a new name as a shareholder at the general meeting.

- The government assumes that the head office will be in Stavanger, as is Statoil’s head office today, says Mr Enoksen. - The company will have a size and expertise in the Stavanger region which maintains and further develops Stavanger’s strong role and position in the Norwegian oil and gas industry.

He also notes that the government assumes that the company will maintain the strong expertise communities possessed by the two companies at several locations in Norway.

- When justified by the level of activity, it is important that the company facilitates further growth in northern Norway, the Minister says. - The government anticipates that increased activity in the far north will provide industrial opportunities, with naturally associated management functions.

The government will have a shareholding of about 62.5 per cent in the merged company. In accordance with the Storting’s decision in 2001 that the government holding in Statoil should be at least 67 per cent, and with the White Paper on state ownership presented in December 2006, the government intends to increase the state shareholding in the merged company over time to 67 per cent.

Shareholders in Hydro will receive 0.8622 shares in the merged company for every share they hold in Hydro as compensation for the transfer of the petroleum business. Shareholders in Statoil and Hydro will hold 67.3 per cent and 32.7 per cent respectively of the shares in the merged company.

The Ministry of Petroleum and Energy and the Ministry of Trade and Industry have initiated an independent review of the financial aspects of the merger. This external evaluation has not produced information which indicates that the government should object to the exchange ratio.

 

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