Moller-Maersk, Dong Energy talks to merge oil business stall over price

Talks between two Danish shipping companies A P Moller-Maersk and Dong Energy to merge their oil and gas business have stalled after they could not agree on a price, Reuters yesterday reported, citing industry and banking sources.

Both companies were unable to agree on the valuation of their assets and the terms of the merger, the report said and added that the negotiations were unlikely to resume "any time soon."

Maersk, Denmark's biggest company, had last month entered into talks with Dong to merge their oil and gas operations in a deal that would create a company valued at over $8.7 billion. (See: Moller-Maersk, DONG Energy in talks to merge oil and gas business)

The talks came after Moller-Maersk said in September that it would split its transportation and oil businesses, or sell off its oil business to focus on its core transport operations.

While Dong Energy, Denmark's largest energy company, had this month said that it would divest its oil and gas assets as part of its plan to shift from fossil fuels toward offshore wind.

Several private equity firms, including EIG Global Energy Partners, have shown interest in Dong, the report said

Maersk yesterday said that it may consider selling assets or cutting dividends in order to retain its credit rating, which is at risk.

Maersk produces over 600,000 barrels of oil a day, while Dong Energy produces about 115,000 barrels a day. Both companies have a majority of their assets in the North Sea.

Earlier Maersk had held inconclusive talks on acquiring some North Sea assets of Royal Dutch Shell.

Dong Energy's oil and gas portfolio includes 14 in Denmark, 19 in the UK (West for Shetland), 23 in Norway, 2 in the Faroe Islands and 1 near Greenland.

Moller-Maersk produces oil from the Danish and UK sections of the North Sea, Qatar, Algeria and Kazakhstan.