Denmark’s AP Moller-Maersk (OTCMKTS:AMKBY) has agreed to sell its oil and gas division to French oil company Total SA (EPA:FP) in a $7.45 billion deal.
In the deal, Total will give Maersk an estimated $4.95 billion in shares. Total will then have $2.5 billion in debt to fund the rest of the deal.
The French oil company have promised to “maintain Maersk Oil’s strong position in the North Sea,”
In a statement, they said: “The combination with Maersk Oil offers Total an exceptional overlap of upstream businesses globally which will enhance Total’s competitiveness and value in many core areas, in particular through some high-quality growing assets,”
The Danish group gave itself a two-year deadline last September to sell off its energy-related businesses. This is to concentrate their focus on logistics and transport.
The sale in Moller-Maersk has been the first move in the company splitting up, with the sale of the oil and gas division likely to be the biggest transaction.
Total’s chief executive, Patrick Pouyanne, said Total would “take advantage of the low-cost environment by being able to launch profitable projects and acquire resources under attractive conditions”.
This is not the only deal that Total has taken part in this year. Earlier in 2017, the group signed a multi-billion deal with South Pars – the gas field between Iran and Qatar.
Total will have the largest stake of 50.1 percent stake, followed by the Chinese CNPC with 30 percent, and National Iranian Oil Co subsidiary Petropars with 19.9 percent.
“This is a major agreement for Total, which officially marks our return to Iran to open a new page in the history of our partnership with the country,” said Pouyanne, on the SOuth Pars deal.
The deal between Total and Moller-Maersk is expected to close in the first quarter of 2018.