Yahoo Finance TOTAL to Expand Electric & Gas Operation Via Acquisition
TOTAL S.A. TOT announced that it has entered into a definite agreement with the controlling shareholders of Direct Energie to acquire 74.33% of its share capital. Price of each share is fixed at €42 ($51.96) and ex-dividend at €0.35 (43.3 cents) per share, representing an aggregate acquisition price of approximately €1.4 billion ($1.73 billion).
The acquisition of majority of Direct Energie’s interest will help TOTAL to expand its electric and gas generation, and distribution operation in France and Belgium. TOTAL aims to develop energy from alternate and clean sources like natural gas. Direct Energie’s acquisition will support the long-term plan of TOTAL, as it will bring in 1.35 gigawatt (GW) of installed capacity and supplement TOTAL’s 900 megawatt (MW) installed capacity.
TOTAL’s Renewable Plans
TOTAL is planning to expand its green power generation globally. The company is using its Total Eren venture to spread operation in developing countries and its subsidiary SunPower Corporation SPWR is helping it to expand renewable operation in the United States.
TOTAL also aims to have a global capacity of at least 10 GW of installed clean power generation within five years. The acquisition of Direct Energie will add 1.35 GW of clean energy generation capacity to TOTAL’s production portfolio. TOTAL has a few more renewable projects under construction, which when completed will help the company reach its renewable goals.
At present, TOTAL has 1.5 million customer accounts and the acquisition of Direct Energie will add another 2.6 million to its existing customer base. TOTAL aims to have 6 million customer accounts in France and more than 1 million in Belgium by 2022. Going forward, this acquisition will help TOTAL to further expand its customer base.
Global Picture
Per the International Energy Agency’s (IEA) report, three countries namely China, United States and India will account for 2/3rd of the global renewable expansion by 2022. Solar Power is expected to dominate the renewable market, thanks to technological development and government support.
The IEA report predicts renewable energy capacity to expand by 43% — or more than 920 GW — within 2022. We believe that the resultant increase in demand for solar panels will create new opportunities for First Solar, Inc. FSLR and JinkoSolar Holding Co., Ltd. JKS among others operating in the renewable space.
Price Movement
In a year’s time, TOTAL’s shares have returned 23.1% compared with the industry’s rally of 20.6%.
Zacks Rank
TOTAL has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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TOTAL S.A. (TOT) : Free Stock Analysis Report
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