Shell And Apache Reach Agreement With Fletcher Challenge Limited On The Proposed Acquisition Of Fletcher Challenge
Shell Overseas Holdings Limited and Apache Corporation (Houston, USA) have signed an Arrangement Agreement with Fletcher
Challenge Limited (FCL) in New Zealand relating to the acquisition of its Energy Division, Fletcher Challenge Energy
(FCE). The acquisition is subject to approval by the New Zealand Commerce and the Overseas Investment Commissions, the
shareholders of FCL and regulatory approvals in other countries where FCE is active.
Shell and Apache’s joint offer of US $ 1.63 billion was the result of an invitation to bid following FCL’s decision to
separate its respective Divisions. Shell’s contribution to this joint offer amounts to US$ 1.03 billion, including
repayment of debt. FCE shareholders will also receive, as additional consideration, an entitlement reflecting the value
of the FCE interest in Capstone Turbine Corporation, a US based turbine manufacturer.
The offer has been accepted by the Board of FCL.
The Arrangement Agreement covers the acquisition by Shell of all FCE’s assets in New Zealand and Brunei. Downstream
interests, such as the Challenge Petroleum retail network (Challenge !), the oil products terminals in New Plymouth,
Timaru and Brisbane (Australia) and the equity in the New Zealand Refining Company, will be subsequently on-sold to a
new independent entity, to be identified by FCL as part of its Court approved separation process. Also to be divested
are FCE’s interests in the Kupe field, in Kapuni Gas Contracts Limited and in Fletcher Challenge Gas Investments
Limited. As part of the Arrangement Agreement FCE’s exploration and production assets in Canada and Argentina will be
acquired by Apache Corporation subject to the necessary approvals.
Commenting on the proposed acquisition, Shell New Zealand Country Chairman Ed Johnson said: “Shell has had an active
upstream presence in New Zealand since 1930 and this deal represents a clear commitment for continued investments in
this country . There is a very good strategic fit between our existing upstream activities and the assets we propose
acquiring from FCL. Indeed we are already partners in some of them and this is a natural business development.”
Shell Regional Exploration and Production Director, Raoul Restucci, reaffirmed: “The proposed acquisition of FCE secures
the natural integration of quality assets with our regional portfolio and a further shift in gas production and
reserves. Total incremental proven and expectation reserves secured by Shell amount to approximately 210 and 350 million
barrels oil equivalent respectively.”
“Subject to regulatory and FCL shareholder approvals, the Shell and Apache bid partnership delivers a highly efficient
and targeted offer, maximising value creation for respective shareholders”.
For further information please contact:
Shell International Media Relations (London) Dave Stuart + 44 (0) 20 7934 3453
Shell New Zealand (Wellington) Antonius Papaspiropoulos + 64 (0) 4 4980149