Total to buy Maersk Oil in $7.5 billion deal

Total (LSE:TTA) has agreed to buy Danish oil and gas firm Maersk Oil for US$4.95 billion, while assuming $2.5 billion of the company’s debt, taking the deal to a total of $7.45 billion.

Owned by the A.P. Moller-Maersk group, Maersk will receive the $4.95 billion through Total shares, and will also be offered the possibility of a seat on the board of directors at the French oil giant.

“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,” said Total in a statement.

The transaction, expected to close by the first quarter of 2018, is the latest in a series of investments by Total in 2017, including a $900 million stake in a Ugandan project and a $2.2 billion investment into Brazilian oil fields and infrastructure.

Patrick Pouyanne, chairman and CEO said: “[The transaction] 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.”