The Shareholders' Newsletter SN #72

Electricity: TotalEnergies fully acquires Total Eren after a successful strategic alliance of five years

Pursuing its profitable growth in the renewable energy sector, TotalEnergies announced in July that it was buying out Total Eren’s other shareholders, increasing its stake from close to 30% to 100%. The Total Eren teams are fully integrated within TotalEnergies’ Renewables business unit. The deal follows the strategic agreement signed between TotalEnergies and Total Eren in 2017, which granted TotalEnergies the right to acquire all of Total Eren (formerly EREN RE) after a five-year period. As part of this transaction, Total Eren is valued at €3.8 billion based on an attractive EBITDA multiple negotiated in the initial strategic agreement signed in 2017. The acquisition of 70.8% represents a net investment of around €1.5 billion for TotalEnergies. Total Eren’s integration should result in an increase in TotalEnergies’ Integrated Power Net Operating Income of around €160 million and cash-flow from operations of around €400 million in 2024.

A global player with a 3.5 GW renewables production and a 10 GW pipeline

Total Eren has 3.5 GW of renewable capacity in operation worldwide and a solar, wind, hydroelectric and storage projects pipeline of over 10 GW in 30 countries, of which 1.2 GW are in construction or late-stage development. TotalEnergies will leverage Total Eren’s 2 GW of assets in operation in merchant countries (notably Portugal, Greece, Australia, and Brazil) to build up its integrated power strategy. TotalEnergies will also benefit from Total Eren’s footprint and ability to develop projects in other countries such as India, Argentina, Kazakhstan, or Uzbekistan.

A complementary fit with TotalEnergies’ footprint and workforce

Total Eren will not only contribute high-quality operated assets, but also the expertise and skills of nearly 500 people based in more than 20 countries. Total Eren’s successful organic growth testifies to the expertise that its teams have built up internally and in connection with partners and suppliers since its creation in 2012. The teams and the quality of Total Eren’s portfolio will strengthen TotalEnergies’ ability to deliver production growth while optimizing its operating costs and CAPEX by leveraging its size and purchasing bargaining power.

Total Eren, a pioneer in green hydrogen

Further to its activities as a renewable energy producer, Total Eren has launched pioneering green hydrogen projects in recent years, located in various regions, such as North Africa, Latin America, and Australia. These green hydrogen activities will be pursued through a new partnership in an entity named "TEH2” (80% owned by TotalEnergies and 20% owned by EREN Group).

With the acquisition and integration of Total Eren, TotalEnergies is opening a new chapter of its development. Total Eren’s expertise and its geographical footprint complementary to that of TotalEnergies will strengthen the Company’s renewable activities and ability to become a profitable integrated power player.