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The deal is in line with the company’s strategy to expand into the electricity market as energy majors face growing pressure to reduce their exposure to fossil fuels while increasing low-carbon businesses in their portfolio.
Total’s shares on the Paris bourse (FCHI) gained 4% in early trade after the deal, and a separate announcement that it was calling off a deal to acquire Occidental Petroleum (NYSE:OXY)’s asset in Ghana.
Total said it was buying EDP’s portfolio of 2.5 million business-to-customers (B2C) base, along with the two power plants, which represented an electricity generation capacity of nearly 850 megawatts.
It added that the transaction with EDP was based on an enterprise value of 515 million euros ($557.4 million).
“This is a major new step in Total’s ambition to become a broad energy company,” Total’s Chairman and CEO Patrick Pouyanne, said in a statement.
“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,” Pouyanne said.
($1 = 0.9240 euros)
