For TotalEnergies, a significant importer of LNG into Europe, the deal provides a network of customers and helps it expand its role in power trading activities in Europe.
Czech billionaire Daniel Křetínský is going to become one of the largest shareholders in TotalEnergies after selling a significant holding in his electricity generation business, which includes his French oil company and many UK power plants.
His companies have holdings in Royal Mail and the West Ham United football club. He has agreed to sell 50% shares in his European power plants to TotalEnergies for about €5.1 billion, in exchange for about 4.1% of TotalEnergies’ share capital.
This deal will make Energetický a průmyslový holding (EPH), his company, one of the major investors in the French company. The deal will also create a new joint venture, where TotalEnergies will have ownership in many electricity generation assets across the UK, France, the Netherlands, and Italy, as it creates a footprint across the European power industry.
Křetínský, who is the chair of EPH, stated that his company has a high interest in becoming a long-term anchor shareholder in TotalEnergies. He also emphasized the importance of creating a joint venture that will help them become a European flexible power generation company. The partnership also shows the evolution in the energy industry, where traditional gas companies are diversifying into electricity generation and trading capabilities.
This typgoon is known as the Czech sphinx. He became the first foreign owner of Royal Mail in its 509-year-long history. The deal was valued at £3.6 billion and is expected to be finalized this month, a year after the initial agreement, after all regulatory challenges have been cleared.
International Distribution Services (IDS), the parent company of Royal Mail, stated that the deal is expected to become unconditional soon, after facing delays related to regulatory issues in Romania and the need to get approval from the UK government, which was granted following a review of national security law.
Křetínský has a business empire in many industries. He is ranked 22nd on the Sunday Times Rich List with a fortune of £7.79 billion, which he built by running coal, gas, and power companies.
Additionally, he owns 27% of West Ham United and a 10% stake in the Sainsbury’s supermarket chain, as well as investments in major retailers such as Macy’s, Foot Locker, and Metro.
Under the TotalEnergies deal, a new 50/50 joint venture was formed between EPH and TotalEnergies, which will own UK power stations, including Lynemouth in Northumberland and Kilroot in Northern Ireland. It will power electricity to more than 3 million homes.
For TotalEnergies, a significant importer of liquefied natural gas into Europe, the deal provides a network of customers for its LNG and helps it expand its role in power trading activities in Europe.
Patrick Pouyanné, Chairman and Chief Executive of TotalEnergies, stated that as the company is a leading gas supplier in Europe, the deal will benefit them as they can capitalize on the integration of gas and power businesses.
It will create value for its liquified natural gas chain and reduce its dependence on oil, which has a fluctuating market. TotalEnergies is investing in renewable projects, such as offshore wind farms and solar installations, in the UK, in addition to its oil and gas operations.
Meanwhile, the electricity network company Eclipse Power Networks, owned by the Octopus Group, has agreed to buy about 20 electricity distribution projects in the UK from Sweden’s energy company, Vattenfall.
After the deal, all the assets will come under the Octopus Group, which already includes Britain’s largest energy supplier, Octopus Energy. This will cause Vattenfall to exit from the UK electricity distribution market, though its wind power operations in the region will continue.
