Total to buy 37% stake in India's Adani Gas

BENGALURU: French energy giant Total will buy a 37.4% stake in Indian gas distribution company Adani Gas, as it looks to capitalise on the South Asian country’s push for cleaner sources of energy.

Total is the third foreign oil major to enter India’s gas sector after BP and Shell, and it comes at a time when India is spending heavily to cut its carbon emissions.

Indian Prime Minister Narendra Modi has set a target to more than double the share of gas in the country’s energy basket to 15% by 2030, while Total has embarked on a series of deals this year to expand its liquefied natural gas (LNG) portfolio.

Total will buy up to 25.2% in Adani Gas from public shareholders at 149.63 rupees per share, representing an 8.7% premium to the stock’s last close and valuing the stake at 41.47 billion rupees ($585 million).

It will also buy another 12.2% stake from the Adani family at an undisclosed price, according to stock exchange filings.

After the deal, the Adani family and Total will each hold 37.4% stake in Adani Gas, while public shareholders will own the remaining 25.2%.

Shares of Adani Gas soared 18.4% on Monday after the deal was announced, while the broader NSE index rose 0.3% in early trade.

“The natural gas market in India will have strong growth and is an attractive outlet for the world’s second-largest LNG player that Total has become,” Total Chairman and CEO Patrick Pouyanné said in a statement.

“Adani will bring its knowledge of the local market and its expertise in the infrastructure and energy sectors. This partnership with Adani is cornerstone to our development strategy in this country,” added Pouyanné.

Total and Adani plan to establish a joint venture to market LNG in India and Bangladesh.

Speaking later at a conference in New Delhi, Pouyanné said the deal will take 6 months to complete, adding that the energy major was looking to capture a substantial part of the Indian gas market with Adani.

Total was also in discussions with partners including Adani for partnership in renewable energy, he said at the India Energy Forum by CERAWeek.

Last month, Total completed the acquisition of Anadarko’s 26.5% stake in the Mozambique LNG project for $3.9 billion, while in June it took over Toshiba’s U.S. LNG business