Exclusive: Maersk, DONG oil and gas merger talks stall over price - sources

Wed Dec 14, 2016 7:31am EST
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By Jacob Gronholt-Pedersen and Ron Bousso

COPENHAGEN/LONDON (Reuters) - Talks between shipping group A.P. Moller-Maersk (MAERSKb.CO: Quote) and DONG Energy (DENERG.CO: Quote) to merge their oil and gas business have stalled after the two Danish firms could not agree on a price, industry and banking sources said on Wednesday.

The breakdown in talks aimed at creating a joint company worth more than $10 billion may open the door for other bids for DONG's operations, which it is spinning off as it moves away from fossil fuels to focus on offshore wind, the sources said.

Maersk entered talks with DONG in November after announcing plans to merge or spin off its energy assets as part of a major restructuring to shift the company's focus to its transport and logistics businesses.

The development will be a blow for Maersk, which said on Tuesday it may consider selling assets or cutting dividends as it seeks to retain its credit rating, which is at risk.

In June, Maersk announced it had lost a major oil production contract in Qatar, adding to capital pressures.

Several private equity funds, including EIG Global Energy Partners, have shown interest in DONG, according to banking sources.

Maersk, DONG and EIG were not immediately available to comment.

This was the second merger attempt of the two businesses in recent years, the sources said.   Continued...

FILE PHOTO - The MV Maersk Mc-Kinney Moller, the world's biggest container ship, arrives at the harbour of Rotterdam August 16, 2013. REUTERS/Michael Kooren