Maersk, DONG Energy in talks over $10 billion oil merger: sources
- Wall Street falls with financials, other post-election gainers
- The FTC Confirms Antitrust Charges Against Qualcomm (QCOM) for Monopolizing Semiconductor Device Used in Cell Phones
- United Airlines (UAL) Tops Q4 EPS by 5c
- Obama shortens sentence of Manning, who gave cables to WikiLeaks
- After-Hours Stock Movers 01/17: (SHLO) Higher; (GIMO) (AFAM) (CSX) Lower (more...)
Crew members look out from the container ship, the MV Maersk Mc-Kinney Moller, as it berths during its maiden port of call at a PSA International port terminal in Singapore September 27, 2013. REUTERS/Edgar Su/File Photo
Find out which companies are about to raise their dividend well before the news hits the Street with StreetInsider.com's Dividend Insider Elite. Sign-up for a FREE trial here.
By Sophie Sassard and Ron Bousso
LONDON (Reuters) - Denmark's A.P. Moller-Maersk
Maersk is working with Bank of America (NYSE: BAC) on the potential deal, while JP Morgan (NYSE: JPM) is assisting Dong Energy, said the people, who cautioned there is no certainty the parties would come to terms.
Maersk said in September it planned to merge or spin-off its energy assets as part of a major restructuring and instead focus on its core transport and logistics businesses.
DONG Energy said this month it was putting its oil and gas assets up for sale, as it wants to shift away from fossil fuels toward offshore wind.
Some analysts have said, however, that it could be hard to find buyers, with many other energy companies also putting assets up for sale due to low oil prices.
"The only thing that would make sense is a complete merger of their businesses,", said one of the sources, who asked not to be names because the deliberations are private.
A spokesman for DONG said: "We are in the very early stages of the sales process. There will be no sale before the end of the year and it is far too early to speculate over timing and indeed potential buyers."
Maersk, Bank of America, JP Morgan declined to comment.
Maersk held talks last year on possibly buying DONG Energy's oil and gas business, but the companies failed to agree on a price, Bloomberg reported in September.
Maersk Oil has suffered a series of setbacks, first and foremost when Qatar chose not to extend its 25-year license to operate the giant Al Shaheen field.
DONG Energy Chief Executive Henrik Poulsen said this month the company was "still in a very early stage of exploring market interest, but it is our impression that there is interest in an asset of this kind."
DONG has said cash flow at its oil and gas business breaks even at $35 per barrel. It has been producing 89,000 barrels of oil and gas per day this year, down from 115,000 barrels of oil and gas daily last year.
Maersk has previously held talks about buying a large part of the North Sea portfolio that Shell
(Additional reporting by Jacob Gronholt-Pedersen in Copenhagen; Editing by Mark Potter)
Serious News for Serious Traders! Try StreetInsider.com Premium Free!
You May Also Be Interested In
- Bats Global Market (BATS) Stockholders Approve Merger Agreement with CBOE (CBOE)
- BAT Reaches Deal to Acquire Reynolds American (RAI) for $49 Billion
- Verizon Communications (VZ) May Acquire Big Cable Company - NYP (CHTR) (CMCSA)
Create E-mail Alert Related CategoriesReuters
Related EntitiesJPMorgan, Bank of America, Definitive Agreement
Sign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!