TotalEnergies, Kretinsky’s EPH to Team Up in $5.9 Billion Power-Generation Deal

Core Viewpoint - TotalEnergies is making a significant investment of nearly $6 billion in a joint venture with Czech utility EPH to enhance its power-generation business, which will also lead to a reduction in annual net capital-expenditure guidance by $1 billion [1][2][7]. Group 1: Investment Details - The transaction, valued at 5.1 billion euros ($5.93 billion), will expand TotalEnergies' generation assets by acquiring half of EPH's platform, which includes gas, biomass plants, and batteries across Western Europe [2]. - The payment for the deal will be made in shares, resulting in EPH becoming one of TotalEnergies' largest shareholders with approximately a 4.1% stake [3]. Group 2: Strategic Goals - This deal aligns with TotalEnergies' strategy to build an integrated electricity player in Europe, aiming to grow its flexible generation capacity to 20 gigawatts [4]. - The joint venture is expected to de-risk a significant portion of TotalEnergies' growth, according to analysts [5]. Group 3: Financial Implications - Following the acquisition, TotalEnergies anticipates a reduction in capital expenditure to around $14 billion-$16 billion annually between 2026 and 2030 [7]. - The company expects an increase in available cash flow of about $750 million per year, with the integrated power segment projected to generate positive free cash flow and contribute to shareholder returns as early as 2027, ahead of the previous 2028 estimate [8].