Harbour Energy PLC (LSE:HBR) shares soared 22% after the company agreed an US$11.2 billion deal to buy a portfolio of assets from German energy group Wintershall Dea.
The portfolio includes upstream assets in Norway, Germany, Denmark, Argentina, Mexico, Egypt, Libya and Algeria, as well as its carbon capture and storage licences in Europe.
It excludes Wintershall Dea’s Russian assets.
Harbour said it expects the acquisition to make it “one of the world’s largest and most geographically diverse independent oil and gas companies”.
The company said it is expected to receive investment grade credit ratings and to benefit from a significantly lower cost of financing resulting from the porting of existing euro-denominated Wintershall Dea bonds with a nominal value of c.US$4.9 billion and a weighted average coupon of c.1.8%.
It said the deal is also accretive to Harbour's free cash flow, supporting enhanced and sustainable shareholder returns.
It described the deal as a "transformational value-creating opportunity for Harbour's shareholders".
Harbour said it supports an increase in Harbour's annual dividend from US$200 million to c.US$455 million together with the potential for additional returns in line with its existing policy.