In order to make a larger presence in India, Total SA will buy a 37.4% stake in Ahmedabad-based Adani Gas Ltd for Rs 6,200 crore. The French energy giant has made an open offer to public shareholders of Adani Gas to acquire up to 25% stake. It has offered to buy shares at 149.63 apiece, which was 8.7% higher than the previous day of the announcement. The deal is an indication of rising global interest in India’s oil and gas sector.
Total SA will purchase 37.4% shares in Adani Gas Limited through a tender offer to public shareholders to acquire up to 25.2% shares subject to applicable regulations and purchase the residual shares from Adani Family. Adani Family and TOTAL SA shareholders shall ultimately hold 37.4% each and public shareholders shall hold remaining 25.2%. as Securities and Exchange Board of India norms mandate listed companies to maintain minimum public shareholding of 25%.
The partnership will help develop regasification terminals including Dharma Ltd on the east coast of India and Mundra in the west. The partnership comes after a year when the two companies had agreed to set up an equal joint venture to import and retail natural gas. Under the deal, Total will bring its LNG as well as retail expertise and will also supply LNG to Adani Gas.
The partnership will enable Adani Gas to set-up gas distribution network across the country, which is now India’s largest city gas distribution company with presence in 71 districts in 15 states to 8% of the country’s population. Going ahead, Adani Gas will look to augment its gas distribution network over the next decade to industrial, commercial and domestic customers for homes and vehicles. Compressed natural gas (CNG) is distributed for use in motor vehicles and piped natural gas (PNG) is supplied for domestic household, commercial and industrial uses. The two companies will build a fuel retail network of 1,500 stations along highways and intercity connections. Also, the partnership will also establish a joint venture to market LNG in Bangladesh.
The acquisition of stake by Total SA will be the largest foreign direct investment in India’s city gas distribution industry. After the deal takes a final shape, the shareholding of Adani family and Total will 37.4% each and the rest with public.
Why Total wants to partner with Adani
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