Total Sells Chemical Unit to Carlyle for $3.2 Billion--Update
October 07 2016 - 6:49AM
Dow Jones News
By Inti Landauro and Matthew Curtin
PARIS-- Total SA has agreed to sell a specialty chemicals
business to investment firm The Carlyle Group for $3.2 billion,
part of the French oil major's efforts to slim down and raise cash
in the face of a slump in oil prices.
The companies said the transaction values Atotech BV, a supplier
of plating chemicals, at 11.9 times the unit's adjusted earnings
before interest, taxes, depreciation and amortization in 2015.
Atotech has a staff of 4,000, based mainly in Germany and
China.
Total has responded to the oil price collapse over the past two
years by increasing oil and gas output, cutting operating costs,
capital investment and raising cash through asset sales. The
company has said it planned to sell $10 billion worth of assets in
the three-year 2015-2017 period.
The Total strategy to deal with an oil barrel worth less than
half what it was 2 1/2 years ago is far from original though the
French company has been more successful than most of its peers to
carry it out. The company managed to keep booking billion-dollar
profits in 2014 and 2015 despite the collapse of the price of its
main products.
The company has decided to cut its investment to between $15
billion and $17 billion a year in 2017, down from more than $20
billion a year when the oil price was above $100 a barrel.
At the same time it gets rid of noncore petrochemical businesses
such as Atotech or adhesive maker Bostik two years ago, Total has
also acquired assets it sees as promising in the future. The
company expects to dispose a net $2 billion worth of assets in
2016.
Over the past few months, Total has bought shale oil assets in
the U.S. and French battery maker Saft while selling assets it
considers aren't profitable enough now or won't be in the future
and assets that aren't part of its core business such as
Atotech.
Total Chief Executive Patrick Pouyanne has recently insisted the
company will remain a strong actor in the oil transformation
industry, which includes oil refining activities, petrochemical
industries and fuel retailing.
Write to Inti Landauro at inti.landauro@wsj.com and Matthew
Curtin at matthew.curtin@wsj.com
(END) Dow Jones Newswires
October 07, 2016 06:34 ET (10:34 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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