Elf Acquitaine agrees merger with TotalFina
15 Jan 2000
Peace has broken out between French oil-to-chemicals giants Elf Acquitaine and TotalFina, as the companies have agreed the latest of the recent wave of mega-mergers. The companies are billing their combination as a `merger of equals', creating the world's fourth largest oil company.
The merger will see TotalFina paying E52million - 10 per cent more than its original offer - for Elf's shares. TotalFina's chairman, Thierry Desmarest, will take control of the group; his opposite number at Elf, Phillipe Jaffre, will step down once the merger has received regulatory approval. The merged company will have turnover around E66million, and over 150,000 employees.
The companies put forward different strategies for the merged group, with Elf proposing a spin-off of the chemicals operations and TotalFina insisting that they stay with the main group. TotalFina's argument carried the day.
Current Elf Atochem chief Jacques Puechal is to head a review of the merged group's chemicals and petrochemicals operations. Puechal will hold a vice-president's seat on the new board, with responsibility for speciality chemicals; TotalFina's Francois Cornelis will hold a similar position in charge of petrochemicals and paints. After the review is completed next March, Puechal will retire.
Despite the size of the merger, consolidation in Europe seems far from over. Desmarest has indicated that he is keen to look for further mergers, and his eye may well rove south to Spain's Cepsa. Elf already owns 45 per cent of this firm, and under Spanish law, TotalFina must now buy the remainder or reduce its holding to 25 per cent.
