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BREAKING NEWS

Total to buy Maersk Oil for 6.4 billion euros

Total boosts North Sea business with 6.4 billion euros deal with Maersk Oil

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Total to buy Maersk Oil for 6.4 billion euros

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Container shipping group Maersk is selling its oil and gas business to Total for 6.4 billion euros ($7.45 billion) in a deal which the French energy company said would strengthen its operations in the North Sea and boost earnings and cash flow.

For Danish company A.P. Moller Maersk (MAERSKb.CO), the sale of Maersk Oil, with reserves equivalent to around 1 billion barrels of oil, fits with a strategy of focusing on its core shipping and logistics businesses.

Under the terms of the deal, Maersk will get 4.2 billion euros in Total shares, and Total will assume 2.1 billion euros of Maersk Oil’s debt.

Maersk said it plans to return a “material portion of the value of the received Total S.A. shares” to shareholders in 2018 and 2019 in the form of extraordinary dividend, share buyback or distribution of shares in Total.

Total promised to “maintain Maersk Oil’s strong position in the North Sea,” and its deal comes after it said last month it was ready to make acquisitions while global assets were still cheap.