Shell and RWE announce downstream joint venture in Germany

30.03.2001

Deutsche Shell GmbH., a wholly owned member of the Royal Dutch/Shell Group of companies (Shell), and RWE have agreed to merge their downstream businesses in Germany into a joint venture. The proposed venture, encompassing the refining, supply, distribution and oil marketing activities of both companies and their associated support services, will enable Shell and DEA to achieve synergies of at least $150 million a year.

Both companies will initially hold a share of 50% in the joint venture. Shell will have majority control from 2004 by acquiring an additional 1% bringing its total shareholding to 51%. RWE, DEA’s parent company, will have the option to sell its share (49%) to Shell. The deal is subject to the approval of the EU regulatory authorities.

For Shell and DEA this plan is a decisive step in making their downstream businesses fit for the future in a highly competitive market and to ensure the delivery of innovative products and services to their customers.

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Paul Skinner, Shell Group Managing Director and CEO Oil Products, commenting on the Joint Venture said: “This proposed JV is entirely consistent with the Shell’s global Oil Products strategy. It will result in a leading downstream position in Germany, which we see as a key market in Europe. It will also have a very high quality asset base and provides an opportunity to strengthen our existing refining portfolio. These factors will enable us to grow further shareholder value in Europe.”

Adrian Loader, President of Shell Europe Oil Products continued: “This JV will have access to world class refineries, two strong brands, a nationwide retail operation and a highly professional workforce. Altogether this represents an excellent platform for further growth and development of our strong European business.”

The planned JV is an important step in RWE’s strategy according to Dr Kuhnt, Chairman of the Board, RWE: “The JV Shell & DEA Oil GmbH will become a leading player in the German Downstream business. This JV forms the basis to meet our customers’ expectations with regard to service and quality and ensures secure and high quality jobs for our employees.”

It is likely that the merger will result in 750 net job losses from a total workforce of 7,500. These will be subject to full consultation and achieved through an agreed social plan. This will include early retirement, voluntary redundancies and other employee schemes. The deal also includes 45 DEA service stations in Poland, which will be integrated into the existing Shell network. They will not be part of the proposed JV.

The company will operate a network of about 3,200 service stations in Germany, retaining both brands. The combined market share of 24% will make the joint venture the market leader in Germany. The JV will also have a network of complementary refineries located at the core of the European marketplace.

The joint venture will become part of Shell’s European downstream organisation and will operate according to the standards, systems, processes and culture of Shell. The headquarters of the new company will be located in Hamburg.

https://www.chemie.de/news/2276/shell-and-rwe-announce-downstream-joint-venture-in-germany.html