Offshore staff
COPENHAGEN, Denmark and LONDON– Discussions between AP Moller-Maersk and DONG Energy to merge their oil and gas business are breaking down, Reuters has reported.
According to the news service’s industry and banking sources, the two companies could not settle on a price.
Talks had been ongoing since last month to create a joint firm worth more than $10 billion following major organizational and strategic announcements in both parties.
In September, AP Moller – Maersk reported plans to reorganize into two separate divisions, Maersk A/S andMaersk Oil, saying that the “main growth focus… going forward will be delivering best in class transportation and logistics services as an integrated Transport & Logistics company.” It said at that time that it expected that the oil and gas related businesses would require solutions, including separation of entities individually or jointly.
Then, in November,DONG Energy announced that it was withdrawing from oil and gas E&P in favor of renewables.
“The development will be a blow for Maersk, which said on Tuesday (Dec. 14) that it may consider selling assets or cutting dividends as it seeks to retain its credit rating, which is at risk,” Reuters said.
Although the report continued by pointing out that the potential join-up of the two Danish companies were seen by many industry insiders as a natural fit, the inability to agree of the valuation of their assets and terms of the merger have likely ended all talks.
The negotiations were unlikely to resume “any time soon,” Reuters reported a source as saying.
12/15/2016
