France's Total to buy Maersk Oil for $7.45 bn

France's Total to buy Maersk Oil for $7.45 bn

France's Total to buy Maersk Oil for $7.45 bn

"T$3 he agreement will strengthen the financial flexibility of A.P. Moller - Maersk and free up resources to focus our future growth on container shipping, ports and logistics", said Soren Skou, chief executive of Maersk.

The boards of both Total and AP Moller -Maersk have approved the transaction for Total to acquire 100% of Maersk Oil for $4.95bn worth in shares in Total and assumption of Maersk' Oil's $2.5bn in debt.

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). There is no lock-up on the shares it will own in Total.

"The valuation of Maersk Oil and Total's commitment is a testament to the quality and standing of Maersk Oil". Alongside Maersk Oil's UK North Sea assets, Total will also take over its Danish and Norwegian... The deal, which is expected to close in the first quarter of next year, will also see Total take over all decommissioning obligations now amounting to $2.9bn.

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Total expects its new acquisition of Maersk's oil & gas business will deliver some US$400mln of synergies, largely thanks to the combination of the respective North Sea operations.

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

"Total S.A. will maintain Maersk Oil's strong position in the North Sea with strong Copenhagen and Esbjerg bases and with Denmark being the operating hub for Total S.A.'s combined operations in Denmark, Norway and the Netherlands", says the Maersk Group in a press release. The deal is subject to regulatory approval from relevant authorities including the Danish energy minister and competition authorities as well as required consultation and notification processes with Total's employee representatives.

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