French energy company and LNG player Total has agreed to buy some power and gas assets in Spain from Portugal’s EDP.
The deal includes 2.5 million B2C customers and two gas-fired combined cycle power plants, which represent an electricity generation capacity of nearly 850 megawatts, Total said on Monday.
EDP will also transfer to Total the 280 employees managing the acquired assests.
The transaction is based on an enterprise value of 515 million euros ($557.4m), according to Total.
This deal follows Total’s entry into Spain’s solar market in February with the acquisition of a portfolio of almost 2 gigawatts of renewable power projects.
It allows the group to implement its growth strategy in the country’s integrated gas and electricity value chain.
The deal will make Total the 4th largest supplier of gas and power in Spain with residential market share of 12 per cent and 6 per cent, respectively.
Total’s chief executive Patrick Pouyanné said in the statement that this is a major new step in Total’s ambition to become a broad energy company.
“This transaction enables Total to become one of the key players in the energy market in Spain, covering a wide spectrum from LNG imports to power generation from renewables and gas, as well as gas and electricity supply”, Pouyanné said.
“Our ambition is to be able to bring a competitive offer from our productions to the Spanish consumers, drawing on the digital and commercial know-how developed in France by Total Direct Energie and in Belgium by Lampiris”, he said.
Pouyanné sees this transaction as fully consistent with the group’s strategy of profitable growth across the gas and low carbon electricity value chain in Europe.
The transaction is also in line with Total’s emission goals as the company is looking to reach net zero emission by 2050.
“With this deal Total will reach 8.5 million gas and power customers in Europe from 2021, on track with its ambition to serve over 10 million customers by 2025”, Pouyanné said.
The transaction remains subject to conditions precedent, including regulatory approval.
Total expects to complete the transaction before the end of 2020.