In a filing to the London Stock Exchange, Shell said it was to sell 71.6 million shares in Woodside at A$31.10 per share (£18.20) which would value the equity stake at £1.303bn, or US$1.7bn.
The sale represents 64 per cent of Shell's stake in Woodside and 8.5 per cent of Woodside's issued capital, Shell said.More news: Sony will sell a PlayStation 4 for $200 on Black Friday
Completion is expected to take place on 14 November, with settlement expected on 16 November. The announcement came after Perth-based company's stock closed at $32.24.
Investors in Woodside Petroleum will have to contend with the confirmation last night that Shell is about to sell most of its holding, with the rest not to far behind.
It will retain a 4.8% interest after the latest deal completes on later and has agreed not to sell any of its remaining shares for a minimum of 90 days. But in 2010, it sold a 10% stake, and a further 9.5% in June 2014.More news: Missouri is taking page from Europe and investigating Google
Shell said today that proceeds from its sale of Woodside shares will be used to reduce the group's net debt.
Australia blocked a takeover bid by Shell for Woodside in 2001 on national interest grounds.
"Woodside will maintain a close working relationship with Shell - as a joint venture partner and customer of Shell technology - and we recognise that Shell will always be part of our history", Woodside Chief Executive Peter Coleman said in a statement.More news: Recovered video leads to new charges in Penn State fraternity death
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