Total buys Maersk's oil business in $7.45bn deal

Total's US$7.4bn tilt for Maersk expected to deliver significant North Sea synergies

Total's US$7.4bn tilt for Maersk expected to deliver significant North Sea synergies

Under the deal Maersk will receive $4.95 billion in Total shares and Total will assume $2.5 billion of Maersk Oil's debt.

Paris: French oil giant Total said Monday that it would buy Maersk Oil, a unit of the Danish shipping giant A.P. Moller-Maersk, for $7.45 billion (6.35 billion euros).

Moller-Maersk CEO Soren Skou said it will become the third largest shareholder in Total, but said it has yet to decide on the offer of a seat on Total's board.

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.

Maersk lost a long-standing agreement to operate Al-Shaheen in Qatar to Total previous year, but is according to media reports in talks with Iran to develop the oil layer of the South Pars field, which is an extension of the Qatari field.

Total will take over all decommissioning obligations now amounting to $2.9 billion and will maintain Maersk Oil's position in the North Sea with strong Copenhagen and Esbjerg bases.

Closing is expected to take place during first quarter, 2018.

The deal is expected to be immediately accretive to both cash flow and earnings per share for Total.

"By selling to Total, we ensure a continued Danish stronghold in the North Sea based on Maersk Oil's leading position within technology development and its track record as a lean, efficient and trusted partner", said Claus Hemmingsen, vice chief executive of Maersk and chief executive of the company's energy division.

"Internationally, in the US Gulf of Mexico, Algeria, East Africa, Kazakhstan and Angola there is an excellent fit between Total and Maersk Oil's businesses allowing for value accretion through commercial, operating and financial synergies".

"There was a debate within Maersk and they finally accepted given that it was attractive and also the fact that an IPO in a tense oil market would not be a right move", he said, adding that no other oil major was bidding for the assets.

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