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. Last Updated: 07/27/2016

France: TotalFina-Elf Deal Would Protect French Oil

PARIS -- French Finance Minister Dominique Strauss-Kahn said Tuesday he favored TotalFina's hostile takeover bid for its French rival Elf Aquitaine because it would protect the companies from a U.S. or British acquisition.

"Is it a good thing that these two French companies join up? I think the answer is certainly yes," Strauss-Kahn said on RTL radio.

"I think it is a good thing if a French group is nearly on the same level with the world's three biggest oil groups and, therefore, protected from a takeover by an Anglo-Saxon or American company."

The government said late Monday that since the merger would not threaten national oil supplies, it does not plan to block the bid. "It is not up to public powers to judge a deal between two private companies," Strauss-Kahn said in a statement.

Elf, privatized in 1994, was at the time the French state's largest concern. The French government no longer has an equity stake, but retains a so-called golden share, allowing it to approve, or veto, any takeover bid.

TotalFina launched its bid Monday, saying it is offering Elf shareholders four TotalFina shares for three Elf shares. The all-stock offer, worth 42 billion euros ($42.94 billion), is conditional upon 66.7 percent approval by Elf shareholders.

The new company would be Europe's third largest oil group after Royal Dutch Shell and BP Amoco, and would likely enjoy strong growth in output and be better able to compete with U.S. and European rivals.

The bid was a further sign of the new aggressive mood in French business, but wasn't welcomed by Elf, whose board said the offer had "not been the subject of any study or discussions."