Total, the French oil major, has followed the lead of Royal Dutch Shell by expanding its exposure to the sector of household energy with a deal that is worth €1.4bn (£1.2bn) to acquire a utility.
Total said that the company plans to acquire a three-quarter stake in Direct Energie at a 30 percent premium to the market price of the energy supplier at last close in a “friendly deal,” prior to presenting a tender offer for the rest of the firm at the same price of €42 per share.
According to Total, the said deal would help in establishing the position of the company as a “leading alternative supplier” of natural gas and electricity by adding the 2.6 million clients of Direct Energie to its existing customer base of 1.5 million customers.
The growing interest of the oil group in the power market follows the decision of Shell to enter electricity supply since it offers “the biggest growth in the energy market.” The deal for the acquisition of First Utility, a big six challenger brand, was rumoured to be worth around £200m.
Elsewhere, Lightsource BP, the solar acquisition of BP, obtained the opportunity to run a £240m renewable investment fund that is focused on India on behalf of the governments of the United Kingdom and India.
Lightsource BP said that the fund aims to increase the company’s investment to £500m through institutional investors and “significant investment” from both Everstone, its joint-venture partner, and Lightsource.
The fund should help the London-based company more than double the firm’s solar portfolio from about 2GW by developing around 3GW to 4GW of projects in the booming solar market of India.
The group is also expecting to roll out solar panels in traditional BP strongholds including Egypt and Oman as well as developing markets in Australia and the United States of America.