TotalEnergies to Buy Renewables Firm VSB for €1.57 Billion
TotalEnergies SE agreed to buy German renewable project developer VSB Group from private equity firm Partners Group Holding AG for €1.57 billion ($1.6 billion).
At the same time, TotalEnergies announced that it reached a deal to sell a 50% stake in a 2 gigawatt portfolio of solar and battery power projects in Texas to funds managed by Apollo Global Management Inc. for $800 million in cash. The deal is part of a policy to reduce its interest in renewable projects to boost the return on capital employed.
“In line with our strategy, these transactions will enable us to optimize our capital allocation in renewables and contributes to improve the profitability of our Integrated Power business,” Stephane Michel, president of gas, renewables and power at TotalEnergies, said in a statement on Wednesday.
The deal was first reported by Bloomberg News.
The French oil and gas major has continued to expand its renewable energy portfolio even as some European peers have slowed investment in solar and wind to reap the benefits of higher fossil fuel prices. TotalEnergies is betting that clean power, alongside liquefied natural gas, will thrive as governments seeks to reduce the use of more polluting coal and oil.
The VSB acquisition will further expand Total’s renewables presence in Germany, where it sees power prices being supported over the long term by the phase-out of coal-fired power plants, and the exit from nuclear power that was completed last year. Completion of the purchase is subject to regulatory approval.
In 2023, TotalEnergies agreed to pay about €5.8 billion over more than two decades for two leases for offshore wind farms in the North and Baltic Seas, in what became Germany’s biggest wind auction and one of the most expensive worldwide.
This year, it completed the purchase of a German developer of battery storage systems and a marketer of renewable power. It also agreed to buy a 50% stake in two offshore wind projects from RWE AG after winning an auction alongside utility EnBW Energie Baden-Württemberg AG that raked in €3 billion for the government.
The VSB announcement comes days after TotalEnergies’ renewables strategy faced a series of setbacks in other regions. On Nov. 25, the company said it won’t make any fresh investment in Indian conglomerate Adani Group — its main partner for clean power projects in India — until the consequences of US bribery indictments against founder Gautam Adani and other individuals have been clarified.
The French firm also suspended the development of an offshore wind farm off the coast of New York as US President-elect Donald Trump signaled he’ll obstruct the green industry championed by his predecessor.
VSB Group offers services including project management and environmental planning in the renewable energy sector. Its projects span solar, hydro and wind power in France, Germany, Poland and Italy. The company has more than 500 employees and 21 branch offices globally.
Partners Group acquired an 80% stake in VSB Group in 2020. The Swiss private equity firm has been considering the sale of some of its infrastructure assets with a combined value of more than $5 billion as it seeks to take advantage of investor appetite in the sector, Bloomberg News reported in March.
