French oil and gas major Total SA (EPA:FP) has agreed to acquire two gas-fired combined cycle power plants and a 2.5-million strong customer base in Spain from Portuguese utility Energias de Portugal SA (ELI:EDP).
Total said on Monday that this transaction will complement its future power production from renewables with flexible electricity generation capacity from gas. The French giant arrived in Spain in February 2020 to tap into the local solar market. It then signed development deals with local firms Powertis SA and Solarbay Renewable Energy encompassing almost 2 GW of solar projects.
Now, Total is pursuing the Spanish business-to-consumer (B2C) market, saying it seeks to become the fourth largest supplier of gas and power in the country. The company is eyeing a 12% and 6% residential market share in the gas and power segments, respectively.
The latest acquisition, subject to certain conditions and regulatory approval, is worth EUR 515 million (USD 556.4m) in enterprise value.
The power plants, located in the region of Navarre, have 843 MW of combined capacity. The B2C business counts 2.5 million residential customers. Around 2.1 million of them are in the portfolio of EDP’s 100% owned EDP Comercializadora, while some 0.4 million are held by CHC Energia, a joint venture formed by EDP and Spanish electricity supplier CIDE HC Energia SA.
The acquisition of CHC Energia’s customers is subject to an agreement with CIDE.
The Portuguese utility said separately the deal could be closed in the second half of 2020.
(EUR 1.0 = USD 1.08)
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