Total SA has agreed to buy the oil and gas unit of A.P. Moller-Maersk A/S for US$4.95 billion, another sign that the pace of deals in the energy sector is accelerating after a long downturn.
Maersk is to receive a consideration of US$4.95 billion in Total shares and the French company will also assume US$2.5 billion of Maersk’s debt, the companies said in statements yesterday.
The transaction is expected to close in the first quarter of next year.
“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,” Total said in its statement.
Total CEO Patrick Pouyanne last month said he was ready and able to make acquisitions and grow production, taking advantage of a plunge in the cost of drilling rigs and other equipment during the three-year industry downturn.
Earlier this year, he agreed to purchase stakes in a project in Uganda from Tullow Oil PLC for US$900 million and said yes to a US$2.2 billion deal to buy into Brazilian oil fields and infrastructure.
Energy deals have picked up pace more broadly in recent months, as the industry puts the worst of the slump behind it.
In offshore drilling, Transocean Ltd’s US$3.4 billion acquisition of Songa Offshore this month was interpreted as a signal that market is bottoming out.
Major oil companies have tended to be sellers, with BP PLC offloading assets, including a US$1.7 billion stake in a Chinese petrochemical venture, and Royal Dutch Shell PLC exiting its Irish venture for US$1.2 billion.
Total is to issue to A.P. Moller-Maersk 97.5 million shares, based on the average
Total share price on the 20 business days prior to yesterday. That would represent 3.75 percent of the enlarged share capital of Total.
There is still cause for caution. Crude oil prices remain stuck at about US$50 a barrel — half the level three years ago — and some notable traders see the outlook for next year weakening.
Total and its European peers can cover spending from cash flow at current prices, but a fresh slump could put dividends at risk, and investors know it.
The US dollar was trading at NT$29.7 at 10am today on the Taipei Foreign Exchange, as the New Taiwan dollar gained NT$1.364 from the previous close last week. The NT dollar continued to rise today, after surging 3.07 percent on Friday. After opening at NT$30.91, the NT dollar gained more than NT$1 in just 15 minutes, briefly passing the NT$30 mark. Before the US Department of the Treasury's semi-annual currency report came out, expectations that the NT dollar would keep rising were already building. The NT dollar on Friday closed at NT$31.064, up by NT$0.953 — a 3.07 percent single-day gain. Today,
‘SHORT TERM’: The local currency would likely remain strong in the near term, driven by anticipated US trade pressure, capital inflows and expectations of a US Fed rate cut The US dollar is expected to fall below NT$30 in the near term, as traders anticipate increased pressure from Washington for Taiwan to allow the New Taiwan dollar to appreciate, Cathay United Bank (國泰世華銀行) chief economist Lin Chi-chao (林啟超) said. Following a sharp drop in the greenback against the NT dollar on Friday, Lin told the Central News Agency that the local currency is likely to remain strong in the short term, driven in part by market psychology surrounding anticipated US policy pressure. On Friday, the US dollar fell NT$0.953, or 3.07 percent, closing at NT$31.064 — its lowest level since Jan.
The New Taiwan dollar and Taiwanese stocks surged on signs that trade tensions between the world’s top two economies might start easing and as US tech earnings boosted the outlook of the nation’s semiconductor exports. The NT dollar strengthened as much as 3.8 percent versus the US dollar to 30.815, the biggest intraday gain since January 2011, closing at NT$31.064. The benchmark TAIEX jumped 2.73 percent to outperform the region’s equity gauges. Outlook for global trade improved after China said it is assessing possible trade talks with the US, providing a boost for the nation’s currency and shares. As the NT dollar
PRESSURE EXPECTED: The appreciation of the NT dollar reflected expectations that Washington would press Taiwan to boost its currency against the US dollar, dealers said Taiwan’s export-oriented semiconductor and auto part manufacturers are expecting their margins to be affected by large foreign exchange losses as the New Taiwan dollar continued to appreciate sharply against the US dollar yesterday. Among major semiconductor manufacturers, ASE Technology Holding Co (日月光), the world’s largest integrated circuit (IC) packaging and testing services provider, said that whenever the NT dollar rises NT$1 against the greenback, its gross margin is cut by about 1.5 percent. The NT dollar traded as strong as NT$29.59 per US dollar before trimming gains to close NT$0.919, or 2.96 percent, higher at NT$30.145 yesterday in Taipei trading
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