TotalEnergies to buy 50% of EPH’s power assets for $5.9bn

Core Insights - TotalEnergies has signed a €5.1 billion ($5.92 billion) all-stock agreement to acquire 50% of EPH's flexible power generation platform in Western Europe, enhancing its gas-to-power integration strategy [1][2] Group 1: Transaction Details - The deal includes assets in Italy, the UK, the Republic of Ireland, the Netherlands, and France, with EPH receiving 95.4 million TotalEnergies shares priced at €53.94 each, representing about 4.1% of TotalEnergies' share capital [1] - A joint venture (JV) will be established, owned equally by TotalEnergies and EPH, to manage the assets and drive business development [2] Group 2: Operational Impact - The transaction is expected to add approximately 15 TWh of net electricity production per year, equivalent to about two million tonnes per annum of LNG [3] - The portfolio includes over 14 GW of gross capacity from operational or under-construction flexible generation assets, benefiting from secured capacity revenues that account for around 40% of the gross margin [3] Group 3: Future Growth and Financials - The acquisition also covers about 5 GW of projects under development, with the JV positioned to drive flexible power generation growth in targeted countries [4] - TotalEnergies anticipates an increase in available cash flow of about $750 million per year over the next five years, exceeding the additional dividend associated with the newly issued shares [4] - The Integrated Power segment is expected to generate positive free cash flow and contribute to shareholder returns as early as 2027, with a reduction in annual net capital expenditure guidance by $1 billion to $14-$16 billion for 2026-2030 [5] Group 4: Strategic Vision - TotalEnergies' chair and CEO emphasized that this acquisition is a major milestone in the strategy to build an integrated electricity player in Europe, enhancing the ability to provide reliable, competitive, and low-carbon energy [6]