French multinational integrated oil and gas company Total has signed an agreement to acquire a 37.4% stake in Indian firm Adani for $600m.
The deal is part of Total’s strategy to supply and market natural gas in India.
This deal gives Total joint control of Adani Gas and is considered to be the largest foreign direct investment in the country’s city gas distribution segment.
Total will purchase the shares in Adani Gas through a tender offer to public shareholders to acquire an interest of up to 25.2%. The deal is subject to regulations and acquisition of the residual shares from the Adani family.
It implies that the Adani family and Total SA shareholders will each hold a 37.4% stake while public shareholders will have the remaining 25.2% interest.
The partnership covers several assets across the gas value chain, including two imports and regasification LNG terminals. These include Dhamra in East India and potentially Mundra in the West. This is in addition to Adani Gas, which is one of the four main distributors of city gas in India of which Adani holds 74.8% while Total will acquire 37.4%.
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By GlobalDataAdani Gas aims to increase the gas distribution over the next ten years through its 38 concessions besides marketing natural gas to commercial and domestic customers, targeting six million homes. It also aims to have 1,500 retail stations in the coming years.
Total chairman and CEO Patrick Pouyanné said: “Energy needs in India are immense and the Indian energy mix is key to the climate change challenge. Firmly investing to develop the use of natural gas in India is in line with Total’s ambition to become the responsible energy major.
“The natural gas market in India will have strong growth and is an attractive outlet for the world’s second-largest LNG player that Total has become.”
As part of the partnership, Total will bring its LNG expertise and will supply LNG to Adani Gas. The two entities will also establish a joint venture (JV) to market LNG in India and Bangladesh.
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.”
Last October, Total signed an agreement with Adani Group for the joint development of multi-energy operations to serve the Indian market.
