French oil giant, Total, on Monday announced that it had acquired 100 per cent of the equity of the E&P company, Maersk Oil & Gas, a wholly owned subsidiary of A.P. Møller – Mærsk, in a share and debt transaction.
Total said in a statement that under the agreed terms, A.P. Møller – Maersk will receive a consideration of $4.95 billion in Total shares, while Total will assume $2.5 billion of Maersk Oil’s debt.
According to the statement, Total will issue to A.P. Møller – Maersk a total of 97.5 million of shares, based on the average Total share price on the 20 business days prior to August 21 (signing date), which will represent 3.75 per cent of the enlarged share capital of Total.
The transaction is expected to close in first quarter 2018 and has an effective date of 1st July 2017.
Commenting on the transaction, Total Chairman and Chief Executive, Patrick Pouyanne, said: “This transaction delivers an exceptional opportunity for Total to acquire, via an equity transaction, a company with high quality assets which are an excellent fit with many of Total’s core regions.
“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 United Kingdom, Norway and Denmark, thus increasing exposure to conventional assets in OECD countries.
Internationally, in the United States 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,” Pouyanne explained.
“We are also very pleased that we will have a new anchor point in Denmark which will host our North Sea Business Unit and supervise our operations in Denmark, Norway and the Netherlands. We intend to build on the strong operational and technical competencies of the Maersk Oil teams in the same way we managed to do it in Belgium with the teams of Petrofina in the refining & chemical businesses,” Pouyanne added.
Pouyanné concluded that the transaction is immediately accretive to both cash flow and earnings per share and delivers further growth over coming years.
“It is in line with our announced strategy to take advantage of the current market conditions and of our stronger balance sheet to add new resources at attractive conditions. By adding such a portfolio of growing conventional offshore North Sea assets, we confirm our strategy for value creation of, on the one hand, playing to our core strengths in order to grow further and, on the other hand, to constantly seek to lower our break-even by delivering significant synergies. This transaction will deepen and accelerate this strategy significantly, as Total will become a 3 Mboe/d major by 2019 to the benefit of all Total shareholders,” he said