Moller-Maersk has secured the separation of the first of its four energy divisions as part of the Danish giant's move to exit the oil business.
Total's acquisition of Maersk Oil is one of the biggest oil-sector deals since Shell's roughly $50 billion acquisition of BG Group previous year. Meanwhile, Total shares were down 0.64% to change hands at €42.39.
Under the terms of the transaction, Maersk will receive $4.95bn worth of Total shares and Total will assume $2.5bn of Maersk Oil's debt. In other words, the deal will make the French oil company northwest Europe's second-largest offshore operator.
Maersk has been in the Danish section of the North Sea for decades.
The cost savings will be seen "in particular by the combination of assets of Total and Maersk Oil in North Sea". The deal is expected to close in the first quarter of 2018 and take effect on July 1, Total said. Mr Pouyanné said that the additional value to the company's portfolio would help it reach a lower breakeven oil price.
Total said the acquisition would bolster its positions in the Gulf of Mexico, Algeria, Kenya and Kazakhstan.More news: All Blacks humble Wallabies again
The takeover is the latest example of consolidation in the North Sea and comes as the industry continues to grapple with the prolonged weakness in crude prices that began three years ago. Total said the production it is buying from Maersk can generate free cash flow at less than $30 a barrel.
The proposed transaction is subject to the applicable legally required consultation and notification processes for employee representatives and to approvals by the relevant regulatory authorities.
"Either launch new projects or acquire new reserves at attractive prices", Total Chief Executive Patrick Pouyanne told reporters.
Total said its purchase of Maersk Oil will position it as the No. 2 operator in the North Sea, which is the seventh-largest oil-and-gas producing region in the world. Total will also take on some $4.9bn worth of decommissioning liabilities.
"This may not be the final word from Total", he said.