Total to Buy Maersk Oil for $7.45 Billion

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Under the deal to acquire Maersk, Total could be the second-largest offshore operation in northwest Europe, which is the seventh largest oil and gas producing region in the world.

Under the agreed terms, A.P. Moller-Maersk will receive a consideration of $4.95 billion in Total shares and Total will assume $2.5 billion of Maersk Oil's debt. Total said that the combination of its and Maersk's assets in the North Sea is expected to "generate operational, commercial, and financial synergies" of more than $400 million per year.

Chairman and CEO Patrick Pouyanné said when releasing results last month his company could "take advantage of the low-priced environment" by taking on new resources.

According to Soren Skou, the firm's chief executive, Maersk expects to make a gain of about $2.8bn from the deal, a portion of which will be returned to shareholders, subject to securing its investment-grade credit rating first. DenmarkÂs A.P. Moller-Maersk A/S is splitting its container shipping and energy operations into two independent entities as part of a major shakeup. The deal hasn't changed Total's forecast for capital expenditure of $15 billion to $17 billion next year. There is no lock-up on the shares it will own in Total.

Hundreds of North Sea workers face an uncertain future after Total bought Maersk Oil in a $7.45 billion deal and warned it would cut jobs.


The deal illustrates Total's strategy of using a strong balance sheet to acquire attractive assets from competitors having emerged from the prolonged oil downturn stronger than some of its rivals.

A week ago, Maersk Oil reported an improvement in second-quarter net income on the back of higher oil prices and lower production costs. Maersk Oil had operated the field since 1992, but will now become part of the firm which took operatorship from it. So far this year, deals in North America have totaled $73.2 billion, more than in all of 2016, according to data from Edinburgh-based consultancy Wood Mackenzie.

After the signing the deal, Maersk will retain an interest in the sector through 97.5 million shares in the French energy conglomerate, equal to 3.76% of Total.

The boards of Total and A.P. Møller-Mærsk, the parent company of Maersk Oil, have approved the purchase.

Total will have the largest stake of 50.1 percent stake, followed by the Chinese CNPC with 30 percent, and National Iranian Oil Co subsidiary Petropars with 19.9 percent.

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