| BUSINESSWEEK ONLINE : SEPTEMBER 27, 1999 ISSUE | ||||||||
| ||||||||
 | ||||||||
| INDUSTRIES
'France Is Changing Rapidly' (int'l edition) With his successful $49 billion takeover of Elf Aquitaine, TotalFina CEO Thierry Desmarest has become not only the head of the world's fourth-largest integrated oil company but also France's top industrialist. In his 30th floor office in the Paris suburb of La Defense one day after the deal, Desmarest discussed the oil business and Europe's economy with European Regional Editor John Rossant and London Bureau Chief Stanley Reed. Q: How long have you had your eyes on Elf? A: Even before the other big mergers in the oil industry, like Exxon and Mobil and British Petroleum with Amoco and Arco, we were trying to develop and become more competitive and resolve our problems in the downstream end of the business. That's why we did the PetroFina deal. But I never thought we'd be able to move so quickly from the eighth- or ninth-largest oil company in the world to the fourth-largest. Q: Will Total's involvement in Iraq and Iran mean that you stay away from doing big business in the U.S.? A: Our business in Iraq and Iran is not going to be a problem. We are, for example, rapidly developing our chemical business in North America. If you take the [U.S.] law on sanctions--we've gotten a waiver already--the sanctions would only concern the group's affiliates that deal directly with Iran. Q: Will you be looking for more acquisitions to further boost competitiveness? A: We are going to be competitive, but I don't pretend to be in all business sectors. In refining and distribution we are among the top players in Europe and Africa, but fairly limited elsewhere. If I take exploration and production, we are very small in North America, but in other places we are the same size as the other supermajors. And I think we can stay perfectly competitive without a strong presence in North America. As far as further consolidation goes, if you look at the four largest players -- Exxon-Mobil, BP-Amoco-Arco, Shell, and now TotalFina with Elf -- it's difficult to imagine any combination of two of these because of antitrust questions. Q: This is the biggest takeover in French history. Is France really changing? A: If a foreign company had been a better fit for us, I would have tried to negotiate a deal. But we were convinced that Total-Elf was the best combination in terms of synergies. Plus it was relatively easy for cultural reasons. The lesson in this is that France is changing rapidly. We have shown in this merger that companies can make an amicable deal without the government. Ten years ago...the government would have decided the outcome of this. Q: How optimistic are you on economic conditions in Europe? A: All the signs are very encouraging with the possible exception of Britain, but even there, demand is not bad even if industrial production is a bit low. On the Continent, economic conditions are very good. We see strong demand for cars. And across Europe, productivity gains continue to be substantial and the competitiveness of European industry--despite the 35-hour work week--is very good. If I compare the situation now to a few years ago, the current context is good. _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ BACK TO TOP |
|  |
 | |
RELATED ITEMS Totalfina's Totally New Game (int'l edition) TABLE: What's ahead for France's New Oil Giant ``France Is Changing Rapidly'' (int'l edition) INTERACT E-Mail to Business Week Online | |||
