The boards of
want to merge their oil and gas activities, creating the world's largest offshore oil operator.
Both Norsk Hydro and Statoil are based in Norway. The new company would have combined production of 1.9 million barrels a day in 2007 and proven oil and gas reserves of 6.3 billion barrels of oil equivalent.
Norsk Hydro's remaining aluminum operations will continue as a standalone company.
Shareholders of Norsk Hydro will own 32.7% of the combined oil company, and Statoil's shareholders will hold 67.3%. Norway's government will own roughly 62.5% of the merged company.