France's Total buys Maersk Oil for €6.34 billion in shares, debt

The North Sea region is among the largest oil and gas producing zones in the world.

For Maersk, the deal concludes a review process that started over a year ago as it looked to combat one of the worst shipping down-cycles and a historic oil-price rout.

Total plans for Maersk oil unit is clear, the French company stated that an acquisition of Maersk Oil will bolster its production by 160,000 barrels a day in 2018.

The acquisition will transform Total into the second-largest operator in the North Sea.

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Denmark will become a 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. That will make the Danish company the second-largest investor in the French giant, according to data compiled by Bloomberg.

CEO Patrick Pouyanne says the company took account of about $3 billion decommissioning liabilities linked to Maersk Oil deal valuation. Shareholders could expect an extraordinary dividend, share buyback, or distribution of the Total shares Maersk will receive in the deal.

Total is a global integrated energy producer and provider, a leading worldwide oil and gas company, and a major player in solar energy with SunPower and Total Solar.

Pouyanne said that Total had proposed a deal to Maersk as an alternative to floating the business. Shares in AP Moller-Maersk closed up 2.9 percent at 13,170 Danish kroner on the Copenhagen Stock Exchange, while Total's share price in Paris ended 0.3 percent higher at 42.78 euros.

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Total will take over Maersk Oil's entire organization, portfolio, obligations and rights with minimal pre-conditions.

APMM will receive an enterprise value per 30 June 2017 of United States dollars 7.45bn paid by 97.5m shares in Total S.A. with a value of USD 4.95bn equal to approx. That will represent 3.75 percent of the enlarged share capital of Total.

Zacks Investment Research lowered shares of A.P. Moller - Maersk A/S (NASDAQ:AMKBY) from a hold rating to a sell rating in a research note released on Friday morning.

"Total is acquiring a deep specialist in unlocking complex reservoirs and boosting recovery factors through enhanced oil recovery techniques", Dr Kretzschmar said.

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