TORONTO, August 22, 2017 /PRNewswire/ --
Onex Busan Financial have recently commented on the recent transaction between Total as they have agreed to acquire Maersk Oil - the oil and gas unit of A.P Moller-Maersk for a number close to $5 billion making this acquisition its biggest since 1999. The acquisition is a sign of industry consolidation and acceleration in the merger and acquisition in the oil industry.
Maersk's share jumped 5.7% following the announcement of the acquisition. The transaction value exceeded analysts' expectations and recorded $7.5 billion paid $4.95 billion of Total shares and shouldering $2.5 billion of Maersk Oil's debt.
Total took advantage of the three-year downturn in the industry and followed up on their CEO's hints earlier that Total will not shy from acquiring companies to grow their business. The deal will help the French Oil giant to expand their business in the North Sea, Uganda, and Brazil.
The deal will give Total about 1 billion barrels of reserve, 80 percent out of which is in the North Sea, according to a statement from the company. It will provide them with 200 thousand barrels a day by the year 2020 rising from the current input of 16 thousand barrels a day.
"Even though oil prices are below $50 a barrel and traders' expectations for a weak 2018, the oil industry is cautiously optimistic, they are safe at the current price but a fresh drop in the benchmark will affect the dividends," said Oliver Saunders, who is the Head of Corporate Trading at Onex Busan Financial.
Total chose to expand in the North Sea instead of joining the fastest growing oil market, the shale oil in the U.S. because the assets in the new market is expensive, according to Pouyanne.
Maersk will become the second largest investor in Total when they receive their 97.5 million shares agreed on. The transaction is subject to regulatory authorities approval, but it's expected to close in the first 3 months of 2018.
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Onex Busan Financial is a well-established, independent wealth manager with a long history of success in meeting the needs of our clients. With offerings that cover multiple jurisdictions around the world, we administer and manage assets of more than US$6 billion on behalf of more than 5,000 clients.
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SOURCE Onex Busan Financial