Maersk and DONG eyeing oil merger – The Post

Maersk and DONG eyeing oil merger

A deal involving a third partner could be in the works

End of an era for Maersk Oil at Esplanaden 50 (photo: Jonn Leffmann)
November 29th, 2016 10:27 am| by Christian W

In late September, the Danish shipping and oil giant Maersk revealed it was splitting into two separate divisions: Transport & Logistics and Energy. And now news is emerging that it is looking at a significant billion-kroner deal with DONG Energy.

According to the British newspaper The Sunday Times, the pair are considering a merger of their oil businesses. Maersk wouldn’t confirm the reports, but Morten Imsgard, an analyst from Sydbank, contended that a merger was an ideal step for both parties.

“Maersk Oil needs more volume and a larger business platform if it wants to complete an independent listing at some point,” said Imsgard according to TV2 News.

“There aren’t that many assets in the North Sea, so when DONG indicates that it has something to sell, it would be odd if Maersk Oil didn’t have a look at it.”

READ MORE: Maersk to split into two divisions

Escaping Esplanaden
Imsgard said the two companies discussed a potential merger last year, and since then both companies have looked into the possibility of consolidating their oil assets.

A prospective deal would not only hinge on the price being right for both parties, but could also include a third party, according to The Sunday Times. It has been speculated that the third party could be EIG, a US equity fund that specialises in the energy sector.

Maersk revealed earlier this year that the future of its oil business would be made clear sometime during the next two years and could end with either a complete sale or an independent listing of its oil division.

And this morning Maersk announced it was moving its oil business out of its iconic address on Esplanaden 50 – also known as the building with the thousand blue eyes – for the first time since the building opened in 1979.

Maersk Oil will move about 1.5 km to an office building further out on the harbour near where the ferry to Oslo docks. It’s being viewed as a move that indicates a desire for further separation.

Meanwhile, DONG has underlined that a possible sale won’t take place until the new year.