updated 9/19/2005 9:39:15 AM ET 2005-09-19T13:39:15

Norsk Hydro ASA said Monday it will buy U.S.-based oil and gas company Spinnaker Exploration Co. for $2.45 billion.

The Oslo-based petroleum and light metals company said the deal had been approved by the boards of both companies and was expected to be completed in the fourth quarter.

Hydro said it will pay $65.50 per share in cash for all outstanding common shares and options of Spinnaker. In addition, Hydro said it will assume approximately $110 million in net interest-bearing debt.

The deal is subject to approval of Spinnaker shareholders and U.S. regulatory authorities, Hydro said.

"Following completion of the acquisition, Hydro expects annual international production growth in 2005-2008 of approximately 40 percent," the company said.

Houston-based Spinnaker has production and exploration assets primarily in the Gulf of Mexico.

Norsk Hydro shares fell 0.3 percent to 726.50 kroner ($114.21) in Oslo trading following the announcement.

Copyright 2005 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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