Spinnaker bought for $2.45 billion

Norsk Hydro announced yesterday that it will acquire Spinnaker Exploration Company in an all-cash transaction for $2.45 billion, boosting Hydro's presence and growth potential in the US Gulf of Mexico. Following completion of the acquisition, Hydro expects annual international production growth in 2005-2008 of approximately 40 percent.

Under the terms of the agreement, approved by the board of directors of both companies, Hydro will pay $65.50 per share in cash for all outstanding common shares and options of US-based Spinnaker Exploration. In addition to the total purchase price for the shares of approximately $2.45 billion, Hydro will assume approximately $110 million in net interest-bearing debt.

“The acquisition is an important breakthrough in Hydro’s international growth strategy,” said Eivind Reiten, Hydro President and Chief Executive Officer. “We believe that the deepwater potential in the Gulf of Mexico is considerable. Hydro’s industry-leading expertise in deepwater exploration and production, combined with Spinnaker’s unique skills and acreage position in the region, will enable us to develop these prospects profitably.”

The acquisition, which is expected to be completed in the fourth quarter of 2005, is subject to approval by Spinnaker Exploration shareholders, and compliance with notification provisions of US antitrust laws and other customary regulatory approvals.