French energy company and LNG player Total has agreed to buy some power and gas assets in Spain from EDP.
The deal includes 2.5 million B2C customers and two gas-fired combined cycle power plants.
These plants represent an electricity generation capacity of nearly 850 megawatts, Total said on Monday.
Portugal’s 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. The company’s residential market share will rise to 12 percent and 6 percent, respectively.
Total enlarging portfolio
Total’s chief Patrick Pouyanné said this was a major step in the company’s ambition to become a broad energy player.
“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.
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 deal is also in line with Total’s emission goals as it aims 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.
Total expects to complete the transaction before the end of 2020.