Total to acquire storage developer Saft for USD 1.1 billion

French oil giant Total filed a friendly tender offer targeting all of the issued and outstanding capital shares of French energy storage developer Saft.

As the two companies announced today, Total is offering to pay €36.50 ($41.62) per share, valuing Saft’s equity at €950 million ($1,1 billion). The offer price represents a 38.3% premium above Saft’s closing share price of €26.40 on May 6 2016, a premium of 41.9% above the volume weighted average share price over the past six months and a premium of 24.2% above the volume weighted average share price over the past year.

Logan Goldie-Scot from Bloomberg New Energy Finance told pv magazine that the acquisition gives Total the expertise in a market that will double in size in 2016, in terms of total deployed capacity.

"Saft manufactures batteries for a number of applications, but the grid-scale storage division is likely to be most attractive for Total," he added. "For Saft, financing is the major rationale behind the deal. Total’s € 21 billion balance sheet would strengthen Saft’s hand when bidding for larger grid-storage contracts".

Indeed, the supervisory board of Saft has already approved the takeover and announced it to be “in line with the interests of the company, its shareholders and its employees”.

In April, Total announced its plans to create a fourth business segment to cover gas, renewables and power. Acquisition of Saft is a part of the company’s ambition to accelerate its development in the fields of renewable energy and electricity, initiated in 2011 with the acquisition of SunPower, CEO of Total Patrick Pouyanné said in the announcement.

“The combination of Saft and Total will enable Saft to become the Group’s spearhead in electricity storage”, he added. “It will notably allow us to complement our portfolio with electricity storage solutions, a key component of the future growth of renewable energy. This transaction will also enable Saft, its management and employees to benefit from Total’s technical, industrial, commercial and financial support. In addition, this transaction will enable Saft to successfully accelerate its development."