TotalEnergies' M&A Deal and Diversification Strategy

2 months ago

Louise Moon

"Shares also edging higher too in Total Energy in France after a new M&A deal announced from them. What should we learn? >> Yeah, so so they're buying a 50% stake. Um that's in a portfolio of assets of power generation assets from an energy holding company called EP. So it's a joint venture, so 50/50 for these assets in Western Europe. So Italy, the UK and others. They're buying that for 5.1 billion. EP that their JV now their JV partner is owned by Czech billionaire General Daniel Kinsky interestingly. Um and in exchange for the deal, they'll get a 4.1% stake in Total. So they'll become one of Total's largest shareholders. So an interesting uh deal in that space. It kind of comes as Total is continuing to expand more in the power sector. It's part of their their diversification. Some of their rivals are uh getting more sales from things like fossil fuels, but they're focusing on electricity. So, as you say, shares ticked higher on the back of that. They they didn't gain uh they weren't, you know, kind of soaring this morning. They only slight ticked higher. potentially held back by them saying that as a result of this new deal, uh they they're lowering their capex guidance by a billion dollars a year. So potentially holding back those gains, but um yeah, an interesting deal in that space this morning."

The discussion on TotalEnergies centers on a new M&A deal where the company is acquiring a 50% stake in a portfolio of power generation assets across Western Europe for 5.1 billion. In exchange, the joint venture partner will receive a 4.1% stake, making them one of Total's largest shareholders. While the deal supports Total's strategic shift towards electricity and diversification away from fossil fuels, the reaction was muted possibly due to the accompanying lowering of capex guidance by a billion dollars a year.

Related Stocks