Danish container shipping giant AP Moller-Maersk is set to sell its oil and gas unit to France's Total for $7.45bn (£5.8bn) in order to focus on its core transport and logistics businesses.
Maersk will receive a consideration of $4.95bn in Total shares and Total will assume $2.5bn of Maersk Oil's debt under the agreed terms. Total has also offered the possibility of a seat on its board to AP Moller Holding.
"[T]he agreement will strengthen the financial flexibility of AP Moller-Maersk and free up resources to focus our future growth on container shipping, ports and logistics," said Soren Skou, chief executive of Maersk.
Subject to approval, the deal is set to close in the first quarter of 2018.
For Total, the move will significantly increase its presence in the North Sea.
The transaction will give the French oil major around an additional one billion barrels of oil equivalent (boe), more than 80 per cent of which are in the North Sea.
Patrick Pouyanne, Total's chairman and chief executive said:
By adding such a portfolio of growing conventional offshore North Sea assets, we confirm our strategy for value creation of, on the one hand, playing to our core strengths in order to grow further and, on the other hand, to constantly seek to lower our break-even by delivering significant synergies.
This transaction will deepen and accelerate this strategy significantly, as Total will become a three million boe per day major by 2019 to the benefit of all Total shareholders.
Total expects to generate operational, commercial and financial synergies of more than $400m per year, in particular by the combination of assets of Total and Maersk Oil in the North Sea.
"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 Claus Hemmingsen, vice chief executive of Maersk and chief executive of the company's energy division.
Last week, Maersk reported it will take a hit of up to $300m from a massive cyber attack in June that crippled its entire IT system. The bulk of the impact is expected be felt in the third quarter.