Total Makes Latest Power Play With Electricity Deal -- Update
18 Avril 2018 - 10:34AM
Dow Jones News
By Sarah Kent
Total SA on Wednesday said it would pay EUR1.4 billion ($1.73
billion) for a majority stake in electricity provider Direct
Energie, the latest step in the company's strategy to become a
power player.
The French oil giant is among the most aggressive in a small
coterie of big oil-and-gas companies that are snapping up
traditional utilities and renewable-energy firms.
The moves represent a strategic shift among big oil players,
grappling with how to manage the potential for a long-term shift
away from fossil fuels and the more immediate pressure of finding a
market for growing supplies of natural gas.
Total has set an ambition to supply 7 million customers with
electricity across France and Belgium by 2022 and is aiming to own
10 gigawatts of installed capacity from gas-fired and renewable
power plants within five years.
Others eyeing a similar strategy include Royal Dutch Shell PLC,
which has also embarked on a flurry of acquisitions in recent
months.
The Direct Energie deal will bring Total 2.6 million new
electricity customers in France and Belgium and nearly 1.4 GW of
installed capacity from gas-fired power plants and renewables.
The deal is "in line with our ambition to become the responsible
energy major," Total Chief Executive Patrick Pouyanne said in a
statement.
Under the agreement, Total plans to initially buy just over 74%
of Direct Energie's shares at EUR42 apiece. The company then plans
to launch a tender offer for the rest of Paris-listed Direct
Energie's shares.
The acquisition has been approved by Direct Energie's board, but
remains subject to further shareholder and regulatory
approvals.
Write to Sarah Kent at sarah.kent@wsj.com
(END) Dow Jones Newswires
April 18, 2018 04:19 ET (08:19 GMT)
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