TotalEnergies announced the signing of an agreement with Energetický a průmyslový holding, a.s. (EPH) for the acquisition of a 50% stake in its flexible power generation platform in Western Europe, valued at EUR 10.6 billion in enterprise value. The transaction involves EPH receiving the equivalent of EUR 5.1 billion in TotalEnergies shares, making it an all-stock deal that the company states will be immediately accretive for TotalEnergies' shareholders.

Under the agreement, 95.4 million TotalEnergies shares will be issued at EUR 53.94 per share, based on the volume-weighted average share price of the twenty trading sessions preceding November 16th. This represents approximately 4.1% of TotalEnergies' share capital and will make EPH one of the company's largest shareholders upon completion of the transaction.

Asset Portfolio and Geographic Distribution

The acquisition covers more than 14 GW gross capacity of flexible generation assets in operation or under construction across four key European markets. The portfolio primarily includes gas-fired power plants, biomass power plants, and battery systems, with secured capacity revenues representing 40% of the gross margin.

In Italy, the portfolio includes 7.5 GW of total capacity, with 3.7 GW in operation, 2.4 GW under construction, including two next-generation gas-fired power plants among the most efficient in Europe, and 1.4 GW under development. The United Kingdom and Ireland segment comprises 7.1 GW, including 5 GW from operating gas and biomass plants, 0.4 GW of batteries under construction, and 1.7 GW under development.

The Netherlands portion includes 3.6 GW, with 2.6 GW from gas-fired plants positioned to meet German market needs, 0.2 GW from batteries under construction, and 0.8 GW under development. France represents the smallest segment, with 1.1 GW, including 100 MW of batteries under construction and 1 GW under development.

Joint Venture Structure and Operations

The transaction will create a 50/50 joint venture between TotalEnergies and EPH, which will handle industrial management of the assets and business development. Each company will market its share of production under a tolling arrangement with the joint venture. The agreement establishes the joint venture as the preferred vehicle for both companies to drive flexible power generation growth in the targeted countries.

The additional net electricity production from the transaction is estimated at 15 TWh annually, increasing to 20 TWh in 2030. TotalEnergies states this will enable the company to capture added value from approximately 2 million tonnes per annum of LNG, leveraging its position as the number one gas supplier in Europe.

Financial Impact and Strategic Benefits

TotalEnergies expects an increase in available cash flow of approximately USD 750 million per year over the next five years, which the company states far exceeds the additional dividend requirement for the newly issued shares. The Integrated Power segment is projected to generate positive free cash flow and contribute to shareholder returns as early as 2027, compared to the previous target of 2028.

The transaction will increase Integrated Power's average capital employed return on capital (ROACE) from 10% to 12% over the next five years. Due to this accelerated inorganic growth, TotalEnergies is reducing its annual net capital expenditure guidance by USD 1 billion per year to USD 14-16 billion per year for 2026-2030, of which USD 2-3 billion is allocated for Integrated Power, while maintaining its 2030 electricity generation target of 100-120 TWh.

Strategic Positioning and Market Integration

The acquisition is positioned to strengthen TotalEnergies' presence in European electricity markets by enhancing the complementary relationship between intermittent and flexible power generation. The company states that this allows for the expansion of power trading activities across Europe and the development of its Clean Firm Power offering for customers, positioning TotalEnergies as a key player to meet Europe's growing data center demand.

The transaction leverages TotalEnergies' LNG supply position in Europe to diversify value creation along the gas value chain, particularly between the United States and Europe. The deal represents a multiple of 7.6x, 2026 EBITDA for the acquired assets.

Patrick Pouyanné, Chairman and CEO of TotalEnergies, described the acquisition as “another major milestone in TotalEnergies' strategy to build an integrated electricity player in Europe” and stated it enables the company to “fully capitalize on gas-to-power integration and create added value for our LNG chain, independently of oil cycles.”

Daniel Kretinsky, Chairman of the Board of EPH, said the transaction reflects “strong appreciation of TotalEnergies, its management team led by Patrick Pouyanné and its strategy” and described EPH's interest in becoming “a long-term anchor shareholder of TotalEnergies.”

The transaction is subject to legal information and consultation processes with relevant employee representatives, as well as approval from competent authorities. Completion is expected mid-2026.

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