Maersk Sells Oil and Gas Division to Total

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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).

It will pay for the company with $4.95 billion in Total shares, while taking on $2.5 billion of Maersk Oil's debt. The Danish company's main shareholder, A.P. Moller Holding, could also get a board seat, that is very important to Maersk. There is no lock-up on the shares it will own in Total.

The deal with Total is expected to be completed sometime in early 2018 - pending approval from the competition authority.

Pouyanne highlighted that the acquisition significantly accelerates the group's strategy to become a 3mln barrel per day producer by 2019.

"The valuation of Maersk Oil and Total's commitment is a testament to the quality and standing of Maersk Oil".

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"Maersk Oil has for nearly half a century been at the forefront of the Danish oil development, been vital to A.P. Moller-Maersk and to this very day plays a decisive role in the Danish and global oil and gas industry", she said.

AP Moller-Maersk CFO Jakob Stausholm said the development of Culzean and Sverdrup would have meant a lot of negative free cash flow in the near-term for the Danish group, which following the deal it will no longer have.

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.

The cost savings will be seen "in particular by the combination of assets of Total and Maersk Oil in North Sea".