By America Hernandez and Alban Kacher
PARIS (Reuters) -TotalEnergies said on Monday it would more than double its net gas generation capacity by acquiring 50% of Czech energy company EPH’s Western European flexible power generation portfolio in a 5.1 billion euro ($5.9 billion) all-stock deal.
The French oil major wants to become a leading global integrated electricity player, combining renewables and gas-fired generation to meet rising demand from sectors such as data centres while increasing power trading profits.
EPH, which is majority-owned by Czech billionaire Daniel Kretinsky, will get 5.1 billion euros in newly issued TotalEngergies shares, making it the French company’s third-largest investor with about 4.1% of its capital.
This would put it behind Total’s employees with 8.9% and Blackrock at 6.7%, LSEG and company data show.
“This positions us as one of the largest electricity players in Europe, boosts our clean power sales … and gives a new dimension to our trading business,” TotalEnergies CEO Patrick Pouyanne told investors on a call.
TotalEnergies shares were up 0.6% to 56.57 euros at 1241GMT.
‘REASONABLE PRICE’
TotalEnergies has been under investor pressure to accelerate disposals and lower its debt after more than $3 billion in acquisitions this year.
But it has also been hunting for opportunities to buy more gas-fired power plants, which are paid handsomely to produce when renewable energy stops.
Bernstein analyst Irene Himona called the price “reasonable” and said it would take TotalEnergies five to six quarters to buy back the shares, assuming an oil price at $65 per barrel.
The deal creates a 50-50 joint venture managing a more than 14 gigawatt portfolio of gas-fired and biomass plants and battery systems across Italy, Britain, Ireland, the Netherlands and France.
TotalEnergies will contribute about 2 million tons of liquefied natural gas annually to produce power at the plants, generating 15 Terawatt-hours (TWh) that it can market to consumers or trade.
It said the assets would help its Integrated Power unit generate cash flow from 2027, rather than 2028.
RBC analyst Biraj Borkhataria said that given Total’s target of boosting electricity production to 100-120 TWh by 2030, the deal “effectively derisks a significant portion of the growth .. [by] front-loading the spending, with the acquisition price effectively offset by $1 billion lower capex over 2026-2030”.
KNOWN PARTNER
Kretinsky, one of Europe’s mostprominent energy and media investors, has built one of the continent’s largest energy holdings over the past two decades by snapping up coal, then gas-fired assets that utilities were selling to improve their green credentials.
TotalEnergies has previously done gas plant deals with EPH in Britain and France.
Pouyanne said Kretinsky requested payment in shares, expressing a desire to become a long-term shareholder, notably due to Total’s green investments, which outpace other majors.
“Through the shareholding … we are implementing our strategic ambition to diversify our geographic exposure, currently concentrated in the EU and UK,” Kretinsky said in a statement.
Completion of the deal is expected by mid-2026, subject to regulatory approvals.
($1 = 0.8613 euros)
(Reporting by America Hernandez in Paris, Alban Kacher in Gdansk; Editing by Emelia Sithole-Matarise, Dominique Patton, Alison Williams and Alexander Smith)
