DSM to sell DSM Energy to TAQA
Royal DSM N.V. announced that it has reached an agreement with TAQA Abu Dhabi National Energy Company PJSC for the sale of DSM Energie Holding B.V. (DSM Energy) for an enterprise value of EUR 285 million. The intended sale is expected to close in Q3 2009, subject to regulatory approvals and notifications.
The disposal consists of the participations which DSM has in oil and gas exploration and pipelines, including the 40% participation in Noordgastransport.
DSM expects to realize a book profit of approximately EUR 275 million after tax on the sale. This profit will be reported as an exceptional item in the income statement at closing. DSM Energy realized net sales of EUR 161 million in 2008.
Rolf-Dieter Schwalb, Chief Financial Officer of Royal DSM gave the following comment: “ The intended sale of the energy business is another important step in DSM’s accelerated transformation towards a Life Sciences and Materials Sciences company. As stated before, in such a company there is no place for participations in oil and gas exploration and pipelines. These participations have a much better strategic fit with TAQA.”
In September 2007 DSM announced that as a result of the accelerated strategic shift towards Life Sciences and Materials Sciences, a number of businesses which do not fit in with the strategy would be carved out and divested. DSM’s participations in oil and gas exploration and pipelines are part of these businesses.
DSM Energy participates in the exploration and production of oil and gas on the Dutch Continental Shelf. DSM participates as non-operator with a stake of up to 25% in the oil and gas joint ventures and owns interests in pipelines, including its 40% stake in Noordgastransport.
DSM Energy has a share in twenty producing oil and gas fields and participates in a number of gas field developments. All fields are located in 25 production licenses. In its strategy, DSM had chosen not to make any further investment and to dispose of its oil and gas interests. Total production in 2008 was the equivalent of 1.8 million barrels of oil. The intended sale includes transfer of all the decommissioning liabilities.
Noordgastransport transports gas produced offshore through a system of pipelines from gas fields in the North Sea to a processing plant in Uithuizen in the north of the Netherlands. Here, the gas is treated so that it matches customers’ specifications, before being delivered to these customers.
The intended sale is dependent on regulatory approvals and notifications and will be submitted to the works councils according to the usual procedures. DSM Energy employs 6 people. They will all transfer to the new owner.
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