Total S.A. Buying Maersk Oil

"I welcome Maersk Oil to the Total family," said Patrick Pouyanné, chairman and CEO of Total. "Building on Maersk Oil's high safety standards, strong technological leadership, operational excellence, and strong Danish heritage, we will intensify and accelerate the push to optimize and extend the Danish oil and gas production."

Total S.A. as agreed to acquire Maersk Oil for the equivalent of $7.45 billion in U.S. dollars through a combined share and debt transaction, the two companies announced Aug. 21. Maersk's news release said Total "will take over Maersk Oil's entire organisation, portfolio, obligations and rights with minimal pre-conditions. Planned development schedules and investments in strategic and sanctioned projects will be upheld."

Under the agreed terms that both companies' boards of directors have approved, A.P. Møller – Maersk will receive consideration of $4.95 billion in Total shares and Total will assume $2.5 billion of Maersk Oil's debt.

For Maersk Group, a transport and logistics and energy company based in Copenhagen, the deal is "a material step forward in its strategy to separate out its oil and oil related activities to create an integrated transport & logistics company, and this transaction will contribute significantly to upholding its strong capital structure," according to the company.

"In determining the best future ownership structure for Maersk Oil, it has been imperative for us that the capabilities and assets created in Maersk Oil continue to be developed, and that long-term investments are upheld, especially in the Danish part of the North Sea," said Søren Skou, CEO of A.P. Moller - Maersk. "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 A.P. Moller - Maersk and free up resources to focus our future growth on container shipping, ports, and logistics."

The company said Denmark will become the regional hub for all Total's operations in Denmark, Norway, and the Netherlands, based on Maersk Oil's capabilities and strong position in the North Sea region.

"Maersk Oil's activities across the North Sea will become part of a leading global operator with a strong performance record and long-term growth interest in the sector. The combination of Total and Maersk Oil's global footprint and geographical overlap will ensure the continued development of Maersk Oil's worldwide strategic and selective assets. 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. 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," said Claus V. Hemmingsen, Vice CEO of A.P. Moller - Maersk and CEO of the Energy division.

"I welcome Maersk Oil to the Total family," said Patrick Pouyanné, chairman and CEO of Total. "Building on Maersk Oil's high safety standards, strong technological leadership, operational excellence, and strong Danish heritage, we will intensify and accelerate the push to optimize and extend the Danish oil and gas production. The addition of Maersk Oil's strong capabilities and high-quality assets to our business will create a leading international operator in the North West European offshore region, making Denmark a regional anchor point for Total's North Sea business. With Maersk Oil's technical and operating competencies and Total's experience and strong financial position, we have an exceptional opportunity to boost the combined competitive position in several core upstream regions and deliver growth, value creation, and career opportunities."

The agreement is subject to regulatory approval from authorities that include the Danish Minister of Energy, Utilities and Climate and relevant competition authorities. It is expected to close during the first quarter of 2018.

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