TotalEnergies to buy German renewables developer VSB for $1.65 billion

12:10 pm Wednesday, December 04th, 2024

(updates story link)

By America Hernandez

PARIS (Reuters) -French oil major TotalEnergies has agreed to buy German renewable developer VSB Group for 1.57 billion euros ($1.65 billion) from Swiss asset manager Partners Group, it said on Wednesday, as it expands in a priority market.

The French firm has identified Germany as a priority growth market for its integrated power business, and said the acquisition would also deepen its expertise in building onshore wind.

While most oil and gas companies roll back green targets, Total has bucked the trend, steadily expanding renewables in locations where it can sell the power directly to consumers and profit off electricity trading during volatile price swings.

RBC analyst Biraj Borkhataria says Germany ticks the boxes for Total.

“They have an offshore wind position there, there’s a large industrial consumer base, and it’s where you’re likely to see structurally higher power prices and structurally more volatility because the Germans are removing baseload power and adding intermittency,” he said.

Germany, Europe’s largest economy and top manufacturer, is also home to significant battery storage and energy management assets owned by Total via subsidiaries Saft, Kyon Energy and Quadra Energy. 

VSB has an 18 GW project pipeline of wind, solar and battery storage technologies mostly in Germany, Poland and France, with 0.475 GW of renewable capacity in operation or under construction.

Reuters first reported Partners Group was considering selling VSB earlier this year.

TotalEnergies currently has 24 GW of gross installed renewable capacity, with targets that call for adding 11 GW by next year and reaching 100 GW by 2030.

TotalEnergies also said it has signed an agreement with funds managed by Apollo for the sale of 50% of a portfolio of 2 gigawatt (GW) solar and battery energy storage systems (BESS) projects located in Texas. The transaction will provide $800 million in cash, it said.

($1 = 0.9537 euros)

(Reporting by Dominique Vidalon; editing by Jason Neely and Elaine Hardcastle)