British chemical stalwart Ineos is set to snap up Dong Energy’s oil and gas business in a £1bn deal.
Ineos, which is headed up by billionaire Jim Ratcliffe, said the move will propel it into a top 10 company and the biggest private group operating in the North Sea.
It will also boost its so-called upstream division, seeing it add a portfolio of production, development and exploration sites off the coast of Denmark, Norway and West of Shetland area.
Around 440 staff will also transfer from Dong on completion of the deal, which is expected in the third quarter.
Ratcliffe, chairman of Ineos, said the business was a “natural fit” for the group as it expands its upstream arm.
He said: “DONG Energy's Oil & Gas Business is a natural fit for INEOS as we continue to expand our Upstream interests.
“This business is very important to us at this stage of our growth plans and we are delighted with the expertise that comes with it.
“We have been successful in our petro-chemical businesses, focussing on operating our assets safely, efficiently and reliably and we intend to do the same with our oil & gas assets.
“We are keen on further growth and already see lots of opportunity within this impressive portfolio when it transfers to INEOS.”
Ineos has agreed to pay £809m and a further potential £193m.
Henrik Poulsen, chief executive of Dong, added: “Since the decision in 2016 to divest our upstream oil and gas business, we’ve actively worked to get the best transaction by selling the business as a whole, getting a good and fair price for it and ensuring the optimal conditions for the long-term development of the oil and gas business.
“With the agreement with Ineos we’ve obtained just that.”
Poulsen concluded: “The transaction completes the transformation of DONG Energy into a leading, pure play renewables company.”
The acquisition comes after Ineos recently snapped up a 235-mile pipeline from BP, which transports nearly 40% of the UK North Sea’s oil and gas production, for up to £193m.
The transfer of ownership is expected to complete within Q3 2017, subject to the receipt of regulatory and other third party approvals.
Ineos employs around 18,500 people across 105 sites in 22 countries and is the 200th largest business in the world, with sales of £31bn a year.
When it launched in 1998, the group had 400 staff and annual sales of £154m.