French oil giant Total has announced the acquisition of of Maersk Oil, a unit of Danish shipping giant A.P. Moller-Maersk, for US$7.45 billion (€6.35 billion).
The company said the deal would make Total the second-largest operator in the North Sea, with substantial operations in Britain, Norway and Denmark.
It will pay for the company with US$4.95 billion in Total shares, while taking on US$2.5 billion of Maersk Oil’s debt. The boards of both companies have approved the deal.
Total said the acquisition would bolster its positions in the Gulf of Mexico, Algeria, Kenya and Kazakhstan.
The deal is expected to be completed in the first quarter of 2018 and would generate some $400 million in cost savings and other synergies each year, which would immediately help to increase the combined group’s cash flow and earnings per share.