Stockholm (NordSIP) – A.P. Møller-Maersk, the Danish transport, logistics and energy conglomerate, signed an agreement yesterday (August 21) to sell Maersk Oil to France’s Total for the sum of USD 7.45 billion in a combined share and debt transaction.
While the decision was made for principally different considerations than reducing fossil fuel dependence, conservation groups and proponents of sustainability lauded the move. “This historical decision signals that Danish industry has understood that the markets and profitability of the future are not to be found in the black gold beneath the earth’s surface but in sustainability, green energy and innovative, circular solutions,” the Danish broadsheet Politiken wrote in an editorial.
The move is intended for Maersk to take a material step forward in its strategy to separate its oil- and oil-related activities to concentrate on its transport and logistics division. Total will take over the entire organization of Maersk Oil, including its portfolio, obligations and rights with minimal preconditions. Already planned development schedules and strategic investments will remain in force.
“In determining the best future ownership structure for Maersk Oil, it has been imperative for us that the capabilities and assets created in Maersk Oil continue to be developed, and that long-term investments are upheld, especially in the Danish part of the North Sea,” said Søren Skou, CEO of A.P. Møller-Maersk. “The agreement will strengthen the financial flexibility of A.P. Møller-Maersk and free up resources to focus our future growth on container shipping, ports and logistics.”
Consequently, Denmark will become the regional hub for all Total’s operations in Denmark, Norway and the Netherlands, based on Maersk Oil’s capabilities and strong position in the North Sea region.
“By selling to Total, we ensure a continued Danish stronghold in the North Sea based on Maersk Oil’s leading position within technology development and its track record as a lean, efficient and trusted partner,” said A.P. Møller-Maersk Vice President and CEO of the Energy division Claus V. Hemmingsen. “Importantly, Maersk Oil will remain close to its technology and innovation partners at the Danish technical institutions and in the oil and gas service industry to the benefit of all parties.”
The transaction is intended to contribute to the upholding of A.P. Møller-Maersk’s strong capital structure. Maersk is receiving USD4.95bn in Total shares, as well as the opportunity to push down USD2.5bn of debt from its parent company into Maersk Oil, according to the Financial Times.
Among the principal reasons given for the breakup was that the rationale for Maersk being a broad-based conglomerate had been disproven following the financial crisis. “The idea was that Maersk Oil was a natural hedge for Maersk Line (the transportation division) – that didn’t work,” according to David Kerstens, an analyst at Jeffries.
Although oil and gas expansion will continue in the North Sea region as planned, Politiken suggests the move indicates that the “often problematic convergence of Danish politics, Danish business interests and social and sustainability economics can be dissolved.”
AP Møller Holding, the controlling shareholder of Maersk, recently established AP Møller Capital, a private equity firm that will manage the recently announced “Africa Infrastructure Fund I” launched by three of the largest pension funds in Denmark.
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