TotalFina at stalemate with Elf Acquitaine over merger
15 Jan 2000
An acrimonious bidding war between France's two chemicals giants, TotalFina and Elf Acquitaine, is stuck at stalemate. TotalFina's original bid of E42bn was rebuffed by Elf, which responded with its own E49billion cash-and-shares offer to buy TotalFina.
Total's latest move in the game is a proposal to increase the offer `in the framework of a friendly agreement.'
TotalFina's proposal would keep the chemicals division within the oil sector, with a strong position in basic monomers and polymers, and marginal businesses (which the company does not define) sold off.
Elf Acquitaine, however, claims that this would in fact lead to chunks of the division being sold off to finance oil projects. Its alternative proposal is for a chemicals division held separate from the oil activities, incorporating all four of the current divisions of Elf Atochem (performance polymers, basic chemicals, specialities, and intermediates/fine chemicals). `We want to build a chemical sector which is responsible, in control of its destiny, judged on its own merits, like BASF and Dow, and enjoying the same assets,' explains Jacques Puechal, Elf Atochem's chief executive.
Merging the two companies would create the world's fourth largest oil and gas group and the fifth largest chemicals group. The companies are equally enthusiastic about this prospect but, as PE went to press, still divided about how to achieve it.
