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French Oil Firm To Buy Petrofina

December 1, 1998

BRUSSELS, Belgium (AP) _ French oil company Total SA is buying Belgium’s Petrofina SA in an $11.8 billion deal creating one of Europe’s largest oil companies.

The merger announcement came as Exxon and Mobil agreed to a record $77.2 billion merger, creating the world’s largest oil company.

``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,″ said Total Chairman Thierry Desmarest. ``The business environment will be tougher than in past years.″

The new company, known as Total Fina, would be Europe’s third-largest oil company and will seek to be listed on the Paris, Brussels, New York and London stock exchanges, a joint statement said.

Employment totals would remain largely unchanged, with 69,100 people working for the new group, officials said.

``The combination of Total and Petrofina will allow the new entity to capture substantial productivity gains, particularly in the North Sea, and to expand its positions in the deep offshore (United States, Angola),″ the statement said.

Total is swapping stock for a controlling 41 percent of Petrofina, Belgium’s largest industrial company. The remainder of Petrofina’s shares will be bid on at a later date, company officials said.

Investors on the Paris stock exchange sent Total shares down almost 10 percent in early trading today.

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 aggressively expanded crude oil and gas businesses.

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