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Major bank believes in an oil merger between Dong & Maersk

In an analysis of the potential for a merger of Dong and Maersk's oil and gas divisions, Credit Suisse points out that Dong's huge tax credit could play a key role, reports Danish daily Børsen.

Photo: Maersk

Swiss bank Credit Suisse has analyzed the advantages and disadvantages of a merger between Dong's and Maersk's oil shares, reports Danish daily Børsen.

In its analysis, the bank writes that a merger of the two companies is likely but that several factors must first be locked into place, including the huge DKK 25.7 billion tax credit built up by Dong Oil & Gas. However taking advantage of this requires sufficiently high production, which Dong itself does not generate. This, though, is something Maersk Oil can boast of, meaning that a potential merger would allow Maersk Oil to deduct huge earnings from tax via its production, writes the newspaper.

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