Total Buys Refiner Petrofina
Dec. 01, 1998
BRUSSELS, Belgium (AP) _ Bent on surviving a new round of mergers shaking up the global oil industry, French petroleum giant Total is buying Belgian refiner Petrofina for $11.8 billion in a deal that would create the world's fifth-largest oil company.
The announcement Tuesday came just hours ahead of news that the top U.S. oil company, Exxon Corp., was buying the No. 2 company Mobil Corp. for $77 billion in the richest corporate takeover in history.
The deal between Total and Petrofina, Belgium's biggest industrial company, would create a new company, Total Fina, that would be the third-largest oil company in Europe.
``There are a number of mergers now. It would be a danger to stay out of this process,'' Total chairman Thierry Desmarest said. ``The move is part of a global change _ oil prices have practically been cut in half over the past year. All companies are seeking to survive in this new situation.''
Investors, believing that Total may be paying too much for Petrofina, sent Total's shares down 12 percent in Paris trading. Petrofina shares rose 18 percent in Brussels.
The deal involves a stock swap that gives Total 41 percent of Petrofina. The remainder of Petrofina's shares will be bid on at a later date. A combined general meeting of shareholders has been called for Jan. 14 to approve the agreement.
Petrofina, which employs 14,700 people worldwide, is one of Belgium's biggest industrial companies, with refining and distribution operations in Europe and the United States.
Total SA employs 54,400 and is France's No. 2 oil company, but has recently expanded its crude oil and gas businesses.