Total to buy Maersk Oil for $7.45 billion

(www.MaritimeCyprus.com) French oil giant Total is buying Maersk Oil, a unit of the Danish shipping giant A.P. Moller-Maersk, for $7.45 billion (6.35 billion euros).

It will pay for the company with $4.95 billion in Total shares, while taking on $2.5 billion of Maersk Oil’s debt. The boards of both companies have approved the deal.

Total said the acquisition would also bolter its positions in the Gulf of Mexico, Algeria, Kenya and Kazakhstan.

“This transaction delivers an exceptional opportunity for Total to acquire, via an equity transaction, a company with high-quality assets which are an excellent fit with many of Total’s core regions,” chief executive Patrick Pouyanne said in a statement.

He said that once completed in the first quarter of 2018, the deal would generate some $400 million in cost savings each year, which would help immediately increase the combined group’s cash flow and earnings per share.

“We are also very pleased that we will have a new anchor point in Denmark which will host our North Sea business unit and supervise our operations in Denmark, Norway and the Netherlands,” Pouyanne said.

Patrick Pouyanné concluded : “This transaction is immediately accretive to both cash flow and earnings per share  and delivers further growth over coming years. It is in line with our announced strategy to take advantage of the current market conditions and of our stronger balance sheet to add new resources at attractive conditions. By adding such a portfolio of growing conventional offshore North Sea assets, we confirm our strategy for value creation of, on the one hand, playing to our core strengths in order to grow further and, on the other hand, to constantly seek to lower our break-even by delivering significant synergies. This transaction will deepen and accelerate this strategy significantly, as Total will become a 3 Mboe/d major by 2019 to the benefit of all Total shareholders.”

Source: Total

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