Total of France agrees to buy 37.4% stake in Adani Gas

Makes open offer at ₹149.63 apiece for 25.2% stake

Total SA of France, the world’s second largest liquefied natural gas (LNG) player, has agreed to buy 37.4% stake in Adani Gas, to tap the potential of the fast- growing gas demand of the Indian market.

“The partnership between Adani (50%) and Total (50%) includes several assets across the gas value chain notably two imports and regasification LNG terminals — Dhamra in East India and potentially, Mundra in the West as well as Adani Gas Limited, one of the four main distributors of city gas in India in which Adani holds 74.8% and of which Total will acquire 37.4%,” said a Total statement.

As part of the deal, Total will purchase 37.4% shares in Adani Gas Limited through a tender offer to public shareholders to acquire up to 25.2% shares subject to applicable regulations and purchase the residual shares from Adani family.

Acquisition cost

Taking into account the divestiture of the group’s interest in Hazira terminal in early 2019, the establishment of this partnership on gas in India represents a net acquisition cost for Total of approximately $600 million (₹4,273 crore) over 2019-2020, the Total statement added.

The French company has offered to buy 25.2% shares from the public shareholders at ₹149.63 a piece, aggregating to ₹4,147 crore. Total’s open offer is 8.7% higher than Friday’s closing price of ₹137.65.

Following the announcement of the deal, Adani Gas shares jumped 9.41% to close at ₹150.60 on the BSE in a firm Mumbai market on Monday.

“Adani and Total have signed definitive agreements to deepen their existing partnership and commitment for developing multi-energy offerings to the Indian energy market. City Gas Distribution is a natural extension of the plans of both partners to invest in infrastructure and assets worth over $1 billion, which span LNG infrastructure and marketing and fuel retail business,” said a Adani Gas statement.

Adani Family and Total SA shareholders shall ultimately hold 37.4% each and public shareholders shall hold remaining 25.2%.

Commenting on the deal, Adani Group Chairman, Gautam Adani, said, “Total’s investment in Adani Gas reinforces India’s natural gas and demand potential. The partnership will derive significant synergies between Adani’s capabilities of developing world-class assets and Total’s global best practices as well as leveraging business synergies across LNG, Fuel Retail and City Gas distribution.”

As part of the deal, Total will bring its LNG and retail expertise and will supply LNG to Adani Gas Limited. Total and Adani will also establish a joint venture to market LNG in India and Bangladesh.

“The natural gas market in India will have a strong growth and is an attractive outlet for the world’s second-largest LNG player that Total has become. Adani will bring its knowledge of the local market and its expertise in the infrastructure and energy sectors. This partnership with Adani is cornerstone to our development strategy in this country.”, said Patrick Pouyanné, chairman and CEO of Total.

As part of the existing joint venture, Adani and Total in the coming years will target to build a fuel retail network of 1,500 retail stations, on the main roads of the country, such as highways and intercity connections.

Adani Gas will also be setting up 1,500 CNG stations for gas distribution over the next 10 years in its and its joint ventures’ geographical areas across 71 districts, 68 towns across 15 states in India.

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