TotalEnergies (TTE) M&A Announcement summary

Deal rationale and strategic fit

• Acquisition aligns with integrated power strategy, focusing on gas-to-power and growth in major deregulated European markets, supporting energy transition goals.

• Expands flexible generation portfolio, providing access to over 14 GW of assets across Italy, UK, Ireland, Netherlands, and France, and supporting electrification and energy security trends.

• Leverages synergies with renewables and LNG supply, enhancing value creation along the gas value chain between the US and Europe.

• Strengthens ability to provide reliable, competitive, and low-carbon energy, including serving data centers and B2B customers.

• Provides a scalable platform for further expansion and integration with existing gas and renewables businesses.

Financial terms and conditions

• All-stock transaction valued at €5.1 billion for a 50% stake, valuing the JV at €10.6 billion, with 95.4 million shares issued at ~€53.94/share, representing 4.1% of share capital.

• Payment is in TotalEnergies shares, with a one-year lock-up for EPH.

• Transaction multiple is 7.6x 2026 EBITDA, with a projected available cash flow of $750 million/year from 2026.

• Transaction is immediately cash-accretive and reduces annual net Capex guidance to €14-16 billion for 2026-2030.

Synergies and expected cost savings

• Integration enables gas supply optimization, leveraging 2 million tons of LNG annually and boosting Clean Firm Power sales.

• Scales up asset-based and cross-border trading opportunities, enhancing value from LNG-to-power integration.

• Secured revenues from capacity contracts and CFDs cover fixed costs, supporting debt financing for growth.

• Expected increase in available cash flow of about $750 million per year over the next five years.