TotalEnergies Achieves Full Acquisition of Total Eren in Renewable Energy Sector
Posted 25/07/2023 11:49
TotalEnergies is taking a significant step in the renewable energy sector by acquiring Total Eren's remaining shares, increasing its stake from almost 30% to 100%. The deal marks the culmination of a successful strategic alliance between the two companies over the past five years. TotalEren's entire team will now be fully integrated within TotalEnergies' Renewables business unit.
The agreement follows a strategic deal signed in 2017, granting TotalEnergies the option to acquire all of Total Eren (previously EREN RE) after the five-year period. The transaction values Total Eren at an Enterprise Value of €3.8 billion based on an attractive EBITDA multiple, as agreed upon in the initial strategic agreement.
For TotalEnergies, this acquisition represents a net investment of around €1.5 billion. The integration of Total Eren is expected to boost TotalEnergies' Integrated Power Net Operating Income by approximately €160 million and its CFFO by around €400 million in 2024.
With 3.5 GW of renewable capacity operational worldwide, Total Eren strengthens TotalEnergies' position as a global player in the renewable energy sector. Additionally, Total Eren has a pipeline of over 10 GW in solar, wind, hydroelectric, and storage projects across 30 countries, with 1.2 GW currently under construction or in late-stage development.
Leveraging Total Eren's 2 GW assets in merchant countries like Portugal, Greece, Australia, and Brazil, TotalEnergies aims to bolster its integrated power strategy. The acquisition also gives TotalEnergies access to Total Eren's expertise and workforce, comprising nearly 500 professionals based in more than 20 countries. The inclusion of these teams will enhance TotalEnergies' ability to deliver production growth while optimizing operational costs and capital expenditure.
In addition to renewable energy production, Total Eren is a pioneer in green hydrogen, having launched several pioneering projects across regions like North Africa, Latin America, and Australia. The green hydrogen activities will continue through a new partnership named "TEH2," with TotalEnergies owning 80% and the EREN Group holding the remaining 20%.
Patrick Pouyanné, Chairman & CEO of TotalEnergies, expressed satisfaction with the successful partnership with Total Eren and emphasized the importance of its team's expertise and geographical footprint for strengthening renewable activities and creating a profitable integrated power player.
Pâris Mouratoglou, Chairman of Total Eren, thanked the various stakeholders who supported their journey to create a leading renewable energy player and acknowledged Patrick Pouyanné's trust and partnership spirit in achieving this milestone.
David Corchia, CEO of Total Eren, lauded the efforts of the company's global teams and expressed confidence in their continued contributions to TotalEnergies' ambitious renewable sector plans. He also highlighted the commitment to the energy transition and decarbonization, including the development of large green hydrogen production projects worldwide through the new partnership with TotalEnergies.