French oil major Total said it will buy a majority stake in electricity retailer Direct Energie in a 1.4 billion euro ($1.73 billion) deal that will make it a major competitor for top French power utility EDF, Reuters reported.
Total said it had entered into an agreement with the controlling shareholders of Direct Energie to acquire 74.33 percent of the firm’s capital at a price of 42 euros per share, ex-dividend of 0.35 euros per share, representing overall an acquisition price of approximately 1.4 billion euros.
The move sees Total become the second-largest power supplier in France, after EdF, and furthers the major’s ambition to expand in the gas-electricity value chain. Please find below comments from Wood Mackenzie on the acquisition. If you have any queries, please get in touch.
Valentina Kretzschmar, research director, corporate analysis, at global natural resources consultancy Wood Mackenzie, said: “The US$1.7 billion acquisition of Direct Energie is Total’s largest investment in low-carbon assets to date.
“Total was already ahead of its peers in terms of the M&A spend on renewables and other clean technologies, which included Saft, Lampiris and Eren.”
She added: “The Direct Energie deal has more than doubled the company’s total inorganic investment, from US$1.6 billion to over US$3.3 billion since 2015. Total’s acquisition of Direct Energie shows that the company is serious about its ambition to build value across the electricity value chain, with both gas and renewables playing a key role.”
