Europe’s second-biggest oil company,Total is preparing for the sale or listing of its rubber and insulation unit Hutchinson that could be worth up to EUR4 billion euros (US$4.6 billion),
Total is under pressure from shareholders to improve its cash flow and protect dividends as it counts the cost of the collapse in oil prices.
A Total spokeswoman declined to comment.
Hutchinson, which began its days as a rubber manufacturer for shoes in 1853, now makes sealing systems and insulation for cars, trains and planes.
It had turnover of EUR 3.28 billion as of the year ended December 31, 2013 according to its website , with over 32,000 employees worldwide.
There are scant financial details about the business but bankers estimate it has EBITDA (earnings before interest, tax, depreciation and amortization) of around EUR450 million and could fetch a multiple of between 8 and 9 times that figure or EUR 3.6-4 billion.
Total could either launch an initial public offering (IPO) of the unit or could attract strategic or private equity bidders, said the sources.
Oil and gas companies around the world have put more than US$110 billion worth of assets on the block as oil prices have halved to less than US$50 a barrel since last June.
Total, which bought a majority stake in Hutchinson in 1974, has pledged to achieve free cash flow before dividends of US$7 billion in 2015 and US$15 billion in 2017, versus US$2.6 billion in 2013.
The firm has taken a more active approach to managing its business in recent years, buying and selling assets more frequently. It plans to sell US$10 billion of assets in 2015-2017, having hit a target of US$15-20 billion of sales in 2012-2014.
In September, it agreed to sell its adhesives business Bostik, to French chemicals group Arkema for EUR1.74 billion.
The French oil company also launched a process in September to sell its 17% stake in the Gulf of Mexico’s Tahiti oil field, which could fetch between US$1.5 billion and US$2 billion,