Norway's Vaar Energi said on Tuesday it will buy smaller Oslo-listed rival BlueNord to form Europe's largest independent oil and gas producer by output, in a deal indicated at around $1.33 billion.
News of the deal sent shares in both companies up more than 5%.
Vaar Energi, majority owned by Italy's Eni, currently focuses on Norwegian oil and gas production, while BlueNord's assets are located on Denmark's continental shelf.
"We want to continue to grow ... I still think there are opportunities to consolidate in Norway, but at some point it becomes natural that we start to look outside," Vaar CEO Nick Walker told journalists during a call.
"Going to Denmark is a similar risk profile as we have in Norway, similar characteristics, and I think it's a very complementary transaction," he said.
Shares in Vaar traded up 5.3% by 0952 GMT, while BlueNord's rose 6.3%.
The combined company expects to pump close to 450,000 barrels of oil equivalent (boed) per day in 2026, with Vaar contributing between 390,000 boed and 410,000 boed and BlueNord predicting it will produce 45,000 boed.
Vaar said it had set a long-term goal of maintaining output at around 450,000 boed, although it could also continue to grow via additional acquisitions.
Norwegian rival Aker BP said last week it aims to produce between 380,000 boed and 400,000 boed this year, but with plans to increase this in the coming years as new fields come on stream.
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