Total To Acquire LNG Business Of Engie For Up To US$2.04 Billion

Published: Nov 08 2017
Deal Summary

Total SA, an integrated energy company, entered into an agreement to acquire upstream and midstream liquefied natural gas (LNG) business from Engie SA, an energy utility company, for a purchase consideration of up to US$2,040 million (MM), including additional payments of up to US$550 MM payable under certain conditions. The transaction will have an effective date of January 1, 2018.

The transaction includes acquisition of a 16.6% interest in the Cameron LNG liquefaction plant with 3 trains currently under construction in Louisiana; a 5% interest in the first train of the Idku LNG project in Egypt. The transaction also includes long term LNG sales and purchase agreements, an LNG tanker fleet as well as access to regasification capacities in Europe. The transaction will expand Total’s liquefaction capacity to 23 MTPA by 2020.

Societe Generale S.A and Rothschild Inc are acting as financial advisors, while Clifford Chance LLP is acting as legal advisor to Engie in the transaction. The transaction will enable Total to become a global leader on the whole LNG chain.

The transaction is expected to be completed by mid-2018, subject to applicable legally required consultation and notification processes, as well as approvals from relevant regulatory authorities and partners on certain contracts.

Patrick Pouyanne, chairman and CEO of Total, said, “The acquisition of Engie’s upstream LNG business enables Total to accelerate the implementation of its strategy to integrate along the full gas value chain, in an LNG market growing strongly at 5% to 6% per year. The combination of these two complementary portfolios will allow the Group to manage an overall volume of around 40 million tonnes of LNG per year by 2020, making Total the second largest global player among the majors with a worldwide market share of 10. With the equity stake in the Cameron LNG project, Total will also become an integrated player in the US LNG market, where the Group is already a gas producer”.

Deal history

Announced: On November 8, 2017, Total entered into an agreement to acquire the upstream and midstream LNG business, from Engie for a purchase consideration of US$2,040 MM.

Planned: On October 23, 2017, Engie intends to sell liquefied natural gas division to Total.

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