BHP, Woodside sign merger deal, approve Scarborough LNG project

Australia’s BHP Group and Woodside Petroleum have signed their AUD$40bn petroleum merger deal, which will see Woodside acquire BHP’s petroleum assets in return for a 48% in the combined company.

Woodside will pay close to $20bn for the assets, and issue scrip to BHP which will be passed on to its own shareholders. The merger ratio is 52% of the combined group for Woodside and 48% for BHP’s shareholders.

In a separate announcement, the two companies said they had given the final go-ahead to spend $12bn on Scarborough and Pluto Train 2, a major liquefied natural gas (LNG) project.

"Merging our petroleum business with Woodside creates a large, more resilient company, better able to navigate the energy transition and grow value while doing so," said BHP chief executive Mike Henry.

"Through the merger we will provide value and choice for BHP shareholders, and unlock synergies in how these assets are managed."

The Scarborough project decision was deferred last year as the two firms put the brakes on capital spending as the oil price crashed during the Covid-19 pandemic.