Total SA entered into agreements to acquire a 37.4% stake in integrated gas utility Adani Gas Ltd., the largest foreign investment in India's city gas distribution sector by an energy major.
Total would purchase 37.4% shares in Adani Gas by conducting a public tender offer to acquire up to 25.2% of the shares from public shareholders and purchasing the residual shares from the Adani family, according to an Oct. 14 news release. As a result, the Adani family and Total shareholders would each hold a 37.4% stake in the utility, while shareholders would hold the remaining 25.2%.
The deal represents a net acquisition cost of about $600 million over 2019 and 2020 for Total, the company said in a separate release.
The deal is expected to result in an expansion of the two entities' existing LNG and fuel retail partnerships and help achieve the utility's target to serve 7.5% of India's population through investments in infrastructure and assets in the next 10 years. Currently, Adani Gas is one of the four main distributors of city gas in India. Total and Adani also plan to form a joint venture to market LNG in India and Bangladesh.
"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," Adani Group Chairman Gautam Adani said.