TotalEnergies has taken a significant stride in its gas-to-power integration strategy, announcing a €5.1 billion all-stock acquisition of a 50% stake in EPH’s flexible power generation platform across Western Europe. The deal, which includes assets in Italy, the UK, Ireland, the Netherlands, and France, underscores TotalEnergies’ commitment to diversifying its energy portfolio and strengthening its position in the European power market.
The transaction, expected to close by mid-2026, will establish a joint venture (JV) between TotalEnergies and EPH to manage a portfolio of over 14GW gross capacity of operational and under-construction flexible generation assets. These include gas-fired power plants, biomass power plants, and battery systems, with approximately 5GW of projects still under development. The assets benefit from secured capacity revenues, accounting for around 40% of the gross margin, providing a stable revenue stream.
TotalEnergies will issue 95.4 million new shares, priced at €53.94 each, representing about 4.1% of its share capital. The deal is expected to add net electricity production of approximately 15TWh per year, enabling TotalEnergies to capture added value equivalent to about two million tonnes per annum of LNG. This integration will leverage TotalEnergies’ strong position in supplying liquified natural gas (LNG) to Europe, diversifying value creation across the gas value chain, particularly between the US and Europe.
The acquisition is anticipated to increase TotalEnergies’ available cash flow by about $750 million per year over the next five years, exceeding the additional dividend associated with the newly issued shares. This accelerated inorganic growth has prompted TotalEnergies to lower its annual net capital expenditure guidance by $1 billion per year to $14-$16 billion per year for 2026-2030, with $2 billion to $3 billion allocated to Integrated Power. Despite this reduction, TotalEnergies maintains its 2030 electricity generation target of 100-120TWh.
TotalEnergies chair and CEO Patrick Pouyanné highlighted the strategic importance of the acquisition, stating, “This acquisition marks another major milestone in TotalEnergies’ strategy to build an integrated electricity player in Europe. By joining forces with EPH as part of a long-term partnership, we are accelerating the implementation of our Integrated Power strategy and strengthening our ability to provide reliable, competitive, and low-carbon energy to our customers by leveraging the complementarity of our renewable and flexgen portfolio.”
The deal also positions TotalEnergies to capitalize on gas-to-power integration, creating added value for its LNG chain independently of oil cycles. Pouyanné added, “Given our position as the #1 gas supplier in Europe, this transaction enables us to fully capitalise on gas-to-power integration and create added value for our LNG chain, independently of oil cycles. We are convinced that this partnership will create lasting value for our shareholders and are also pleased to welcome a new long-term European shareholder who is fully committed to TotalEnergies’ transition strategy.”
The transaction is subject to legal information and consultation procedures with relevant employee representatives and approval from competent authorities. The JV is set to become the preferred vehicle for TotalEnergies and EPH to drive flexible power generation growth in the targeted countries.
This strategic move by TotalEnergies could reshape the European power market, fostering greater integration between gas and power sectors. It also highlights the growing importance of flexible generation assets in supporting renewable energy integration and ensuring grid stability. As the energy transition progresses, such partnerships may become increasingly common, driving innovation and efficiency in the sector. The deal’s success could serve as a blueprint for other energy companies looking to diversify their portfolios and enhance their competitive positioning in the evolving energy landscape.