Statoil, Norsk Hydro Sign Takeover Plan

The boards of Statoil and Norsk Hydro signed a final plan Tuesday for a takeover that the companies said will create the world's largest offshore oil company.

The new company, to be called StatoilHydro until a permanent name is agreed, will be created by state-controlled Statoil taking over the oil and gas division of its smaller Norwegian rival Norsk Hydro.

In announcing the plan in December, the companies said the $30 billion (23 billion euro) deal was largely motivated by their will to expand outside Norway and that it would surpass Royal Dutch Shell as the world's largest offshore oil producer.

"The reason for the merger is a mutual desire to create a globally competitive player in the petroleum industry and to be the world's biggest offshore operator," a joint news release said Tuesday.

Hydro's shareholders would hold 32.7% of the new company and Statoil's shareholders would own 67.3%, as previously announced, the statement said. It said the new company will have about 31,000 employees, including about 5,000 from Hydro.

Although the deal requires the approval of both companies' general assemblies of shareholders, that seemed assured because the Norwegian government owns 71% of Statoil and 44% of Norsk Hydro.

The government would own 62.5% of the new company, and Prime Minister Jens Stoltenberg has said he wants to raise the government stake to 67% to assure two-thirds control.

Last week, the companies agree to use the working name StatoilHydro until the new company's board was in place to decide a new name. The original takeover agreement had specified that the company would have a completely new name, and the move to call it StatoilHydro was intended to quiet a simmering debate over its name.

The final plan was announced after the Oslo stock exchange closed for the day. Statoil shares closed up 0.32% at 155 kroner ($25.32, 12.22 euros), while Norsk Hydro was down 0.40% at 186.75 kroner ($30.50, 22.83 euros).

After the takeover, Oslo-based Norsk Hydro will continue to operate as a light metals and power company.