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. The deal will give AP Moller – Maersk a 3.75% stake in Total has also offered a seat on its board to AP Moller Holdings.
It represents the first major execution in AP Moller – Maersk’s strategy to focus on container transport and logistics as its core business and separate its oil related businesses.
“The valuation of Maersk Oil and Total’s commitment is a testament to the quality and standing of Maersk Oil. In addition, the agreement will strengthen the financial flexibility of AP Moller – Maersk and free up resources to focus our future growth on container shipping, ports and logistics,” said Soren Skou, ceo of AP Moller – Maersk.
In September last year AP Moller – Maersk announced it was splitting its business in two with a core division focused on integrated transport and logistics, which includes Maersk Line, AP Moller Terminals and Damco, and an energy division comprising Maersk Oil, Maersk Drilling, Maersk Supply Service and Maersk Tankers. The group said it would seek mergers, listing and joint ventures for the businesses in its energy division.
Having found what it describes as “a structural solution” for Maersk Oil, the group aims to define solutions for Maersk Drilling, Maersk Tankers and Maersk Supply Service before the end of 2018.
Patrick Pouyanne, chairman and ceo of Total said: “The combination of Maersk Oil’s North Western Europe businesses with our existing portfolio will position Total as the second operator in the North Sea with strong production profiles in UK, Norway and Denmark, thus increasing exposure to conventional assets in OECD countries.
“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.”
Under the deal Denmark will become Total’s operations regional hub for Denmark, Norway and the Netherlands.
“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 Hemmingson, vice ceo of AP Moller – Maersk and ceo of its energy division.
“Importantly, Maersk Oil will remain close to its technology and innovation partners at the Danish technical institutions and in the oil and gas service industry to the benefit of all parties.”
The transaction is expected to close in first quarter 2018.
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