LONDON—A deal aimed at creating Europe’s largest independent oil and gas exploration and production company took a step forward this week as German chemicals group BASF SE and LetterOne Group said they had reached a formal agreement to merge their energy businesses.
Under the terms of the agreement, BASF will initially hold 67% of the combined company, Wintershall DEA. LetterOne, the investment fund run by Russian billionaire Mikhail Fridman, will hold the remaining 33%. The two businesses plan an initial public offering of...