MOSCOW (MRC) -- Total SA has agreed to sell a specialty chemicals business to investment firm The Carlyle Group for USD3.2 billion, part of the French oil major’s efforts to slim down and raise cash in the face of a slump in oil prices, reported The Wall Street Journal.
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 USD10 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 2,5years 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 USD15 billion and USD17 billion a year in 2017, down from more than USD20 billion a year when the oil price was above USD100 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 USD2 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.
Total S.A. is a French multinational oil and gas company and one of the six "Supermajor" oil companies in the world with business in Europe, the United States, the Middle East and Asia. The company's petrochemical products cover two main groups: base chemicals and the consumer polymers (polyethylene, polypropylene and polystyrene) that are derived from them.
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