French oil major Total has agreed to acquire a majority stake in French electricity retailer Direct Energie for €1.4bn ($1.73bn), in a bid to strengthen its position in the electricity supply market in France and Belgium.
Image: Total headquarters in Paris, France. Photo: courtesy of I Tangopaso (talk)) created this photograph/Wikipedia.
Under the terms of the deal, Total will acquire 74.33 % of controlling stake in Direct Energie from Impala and other investors at a price of €42 per share.
Upon completion of the deal, Total plans to offer a tender to buy the remaining stake at the same cost per share.
Total chairman and CEO Patrick Pouyanné said: “Through this transaction, Total is actively pursuing its development in electricity and gas generation and distribution in France and Belgium.
“This friendly takeover is part of the Group’s strategy to expand along the entire gas-electricity value chain and to develop low-carbon energies, in line with our ambition to become the responsible energy major.”
Total said that the acquisition will contribute to its aim to become a standard-setting player in power supply in France and Belgium. The firm is targeting over 6 million customers in France and more than one million in Belgium by 2022.
The acquisition will enable Total to add Direct Energie’s 2.6 million client portfolio to its 1.5 million client portfolio.
Additionally, Direct Energie’s 1.35GW of installed capacity, including 800MW of gas-fired power plant and 550MW of renewable electricity, will supplement Total’s 900MW installed capacity.
Within five years, Total intends to have at least 10GW of installed global capacity from gas-fired power plants and renewable projects.
Total said in a statement: “With this transaction, Total is also pursuing and expanding its development in the power generation market, with Direct Energie’s power generation activities offering an excellent complementarity with those of the Total group’s subsidiaries operating in these fields.”
Total’s proposed acquisition of stake in Direct Energie remains subject to condition precedent related to the prior approval of the European commission.