Total completes 73% stake purchase in French alternative energy co

French oil major Total SA (EPA:FP) said Friday it has completed the acquisition of a 73.04% stake in Direct Energie SA (EPA:DIREN), an electricity and gas supplier with substantial renewable assets, for about EUR 1.4 billion (USD 1.6bn).

Direct Energie provides electricity and gas to more than 2.6 million residential and non-residential customers in France and Belgium. It has 1.35 GW of installed capacity, of which 800 MW gas-fired power and 550 MW renewable electricity, including onshore wind, solar, hydro and biogas. Its project portfolio includes a 400-MW gas-fired power plant and a 2-GW pipeline of renewable electricity projects in France.

Total acquired the 73% stake from Direct Energie's main shareholders for EUR 42 per share, pursuant to an agreement signed in April. On Friday, the oil group also filed a mandatory tender offer for the remaining Direct Energie shares it does not own at the same price of EUR 42 apiece.

"This operation allows us to accelerate our integration downstream along the full gas and power value chain and to reach critical mass in the French and Belgium markets where we are growing fast," said Total chairman and chief executive Patrick Pouyanne.

The integration of Direct Energie brings Total's customer portfolio in the energy supply market to 4 million sites in France and Belgium, and the combined company now aims to reach over 6 million customers in France and more than 1 million in Belgium by 2022. Total also targets at least 10 GW of installed capacity, gas-fired or renewable power, globally within five years. The figure will come from Direct Energie's current installed capacity, Total group's own installed capacity of 900 MW, Direct Energie's pipeline, the activities of renewables developer Total Eren in emerging countries and Sunpower Corp (NASDAQ:SPWR) in the US.

(EUR 1 = USD 1.175)

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