Total to take 37.4% stake in Adani Gas for over US$800m

In the French energy major’s biggest bet on India’s clean energy push, Total SA will acquire 37.4 per cent stake in Adani Gas Ltd in a deal worth around US$803 million

October 14, 2019

The French energy giant will buy the stake in Adani Gas through a combination of tender offer to public shareholders and from the Adani family

This is the largest foreign direct investment in India’s rapidly-growing city gas distribution sector by a global energy major, exerting confidence

The expanded partnership will develop regasification terminals, expand capacity, sell LNG, and distribute gas to 7.5 per cent of India’s population

Over the coming 10 years, Adani and Total will build a fuel retail network of around 1,500 stations along highways and intercity connections

In the largest foreign direct investment in India’s city gas distribution sector by a global energy major, Total SA will acquire 37.4 per cent stake in city gas distributor Adani Gas for around US$803 million. The deal marks the French energy major’s biggest bet on India’s clean energy push, and gives Total joint control of Adani Gas, along with the Adani Group.

Total, the world’s second-largest liquefied natural gas (LNG) company, will buy the stake in Adani Gas through a combination of tender offer to public shareholders and from the Adani family. Eventually, the Adani family and Total shareholders will hold 37.4 per cent stake each and public shareholders will hold the remaining 25.2 per cent. Publicly traded companies in India have to maintain a minimum public shareholding of 25 per cent.

The expanded partnership will develop regasification terminals, including Dhamra LNG on the east coast, sell liquefied natural gas (LNG) and through Adani Gas distribute gas to 7.5 per cent of India’s population. The latest announcement comes a year after the two firms agreed to set up an equal joint venture to import and retail natural gas. As part of that, Adani and Total will build a fuel retail network of 1,500 stations along highways and intercity connections over 10 years. 

India’s projected economic growth has created a suitable environment for increased foreign funding in the energy sector. Given that the economy is poised to experience growth of more than 7 per cent, many companies have successfully raised funding through overseas bond market and this funding route will likely grow manifold going forward. India, the world’s third-largest oil consumer, is seeing steady growth in demand and will need increased investment to boost capacity. 

Over the past years, India has seen rising number of deals spanning the upstream to the downstream energy spaces. In order to maintain this growth, and provide energy access to a growing population of over 1.3 billion people, the country is prioritising on providing affordable and sustainable clean energy. 

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