Total S.A. (Paris, France; www.total.com) is pleased to announce that the Boards of Total and A.P. Møller – Mærsk have both approved the acquisition of 100% of the equity of the E&P company Maersk Oil & Gas A/S (Maersk Oil; Copenhagen, Denmark; www.maerskoil.com), a wholly owned subsidiary of A.P. Møller – Mærsk A/S, by Total in a share and debt transaction.
Under the agreed terms, A.P. Møller – Maersk will receive a consideration of $4.95 billion in Total shares and Total will assume $2.5 billion of Maersk Oil’s debt. Total will issue to A.P. Møller – Maersk A/S, 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% of the enlarged share capital of Total. Underpinning this share based partnership, subject to Total shareholders’ approval, Total has also offered the possibility of a seat on its Board of Directors to A.P. Møller Holding A/S, main shareholder of A.P. Møller – Mærsk.
The proposed transaction is subject to the applicable legally required consultation and notification processes for employee representatives and to approvals by the relevant regulatory authorities. The transaction is expected to close in first quarter 2018 and has an effective date of 1st July 2017.
The combination with Maersk Oil offers Total an exceptional overlap of upstream businesses globally that will enhance Total’s competitiveness and value in many core areas, in particular through some high quality growing assets and through the delivery of synergies. Specifically the transaction will bring the following benefits to Total:
Around 1 billion boe (barrel of oil equivalent) of 2P/2C reserves, 85% of which are in OECD countries (more than 80% in the North Sea), contributing to Total’s continuous balancing of country risks of its portfolio to enhance shareholder value
– The addition of 160,000 boe/d of mainly liquids production in 2018, acquired at an average price of $46,000/boe/d, offering high margins with an estimated free cash flow break-even of less than $30 per barrel and growing to more than 200,000 boe/d by the early 2020’s further strengthening Total’s leading production growth outlook
– Total expects to generate operational, commercial and financial synergies of more than $400 million per year, in particular by the combination of assets of Total and Maersk Oil in North Sea, an area of excellence for both companies
– The transaction is immediately accretive to both earnings and cash flow per share underpinning Total’s dividend profile.