Traditional Gas Getting Worried About The Future? Total To Acquire Battery Maker Saft In $1.1 Billion Deal

1 year ago by Mark Kane 20

SAFT Intensium® Home 10M

SAFT Intensium® Home 10M energy storage system

Saft

Saft

Total, one of the largest oil and gas companies in the world, intends to acquire battery manufacturer Saft for about $1.1 billion.  Loose change found in the sofa cushions we assume.

Both Total and Saft are French companies, and so the press release states “friendly tender” is in play, which makes acceptance very probable.

The deal does raise a lot of questions. Whether it’s more than just a business decision? And whether it signals a sign for other players from the oil industry to enter the battery (and EV) market as a future-hedge?

“Total and Saft announced today that, following the signature of an agreement between the companies, Total filed a friendly tender offer on all of the issued and outstanding shares in the capital of Saft with the French Financial Markets Authority (Autorité des Marchés Financiers (“AMF”)).

The proposed offer will target all of Saft’s issued and outstanding shares at a price of €36.50 per share, ex-dividend of €0.85 per share, valuing Saft’s equity at €950 million.

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. The offer values the company at nine times its 2015 reported EBITDA, which represents a significant control premium compared to recent valuation multiples in the battery industry.

The Supervisory Board of Saft has unanimously approved the friendly takeover by Total and considers the proposed transaction to be in line with the interests of the company, its shareholders and its employees. As part of the reasoned opinion that it must issue in accordance with market regulations, the Supervisory Board has also announced its intention to recommend that its shareholders tender their shares.

The Supervisory Board of Saft has decided to appoint Finexsi as an independent expert. The proposed offer is subject to review by the AMF, which will evaluate its compliance with applicable laws and regulations.”

Total, the Paris headquarters (Wiki)

Total, the Paris headquarters (Wiki)

Patrick Pouyanné, Chairman and CEO of Total said:

“The combination of Saft and Total will enable Saft to become the Group’s spearhead in electricity storage. The acquisition of Saft is part of Total’s ambition to accelerate its development in the fields of renewable energy and electricity, initiated in 2011 with the acquisition of SunPower. Saft’s renowned technological know-how and unique expertise have allowed it to develop innovative and competitive solutions for its clients. 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.”

Yann Duchesne, Chairman of Saft’s Supervisory Board said:

“We are delighted with this rapprochement, which was unanimously approved by the Supervisory Board thanks to its strong industrial rationale and its financial interest for our shareholders,”.

Ghislain Lescuyer, Saft’s CEO, commented:

“I am convinced that Total will provide Saft with the required expertise and resources needed for its future development, particularly in terms of technological and commercial capabilities. This transaction will benefit Saft’s clients and employees, who will be joining a major player in the energy space.”

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20 responses to "Traditional Gas Getting Worried About The Future? Total To Acquire Battery Maker Saft In $1.1 Billion Deal"

  1. MikeG says:

    Not too many years ago, oil companies would buy a disruptive tech company and eliminate or restrict its sales, like Chevron limiting sales of NiMH cells to top-tier OEMs.

    If you can’t beat them, join them.

    1. evcarnut says:

      They’ll buy it & SHUT IT DOWN!

      1. Mart Shearer says:

        Look at BP and Royal Dutch Shell’s record with PV technology. Texaco-Chevron and Ovonics has already been mentioned. If this goes through, it is the end of Saft. Oil and gas companies stick to their core competencies: They are NOT “energy companies” and will not persist in electrical generation or storage.

      2. Aaron says:

        @evcarnut: What? Another Ovonics? Never! /s

    2. Speculawyer says:

      Meh. That whole ovionics patent thing is more conspiracy than reality. An oil company cannot just sit on a patent like that. That would violate anti-trust rules.

      The fact is that NiMH batteries were just too expensive and not that good. If they were good then we would be using them now. But they are just too heavy and too expensive. That’s why they went no where . . . not because of any oil company.

  2. James says:

    Hope they don’t hold any important battery patents. Be worth a billion dollars for oil companies to shut the EV industry down.

    1. Aaron says:

      Or $5 trillion according to the IMF…

  3. Pushmi-Pullyu says:

    Some of us think Big Oil companies are evil, but one thing they’re not is stupid. They can see the handwriting on the wall as well as anyone, despite their anti-reneweable-energy, anti-nuclear-energy, and anti-EV propaganda. They’re not gonna bury their heads in the sand and pretend change will never happen, as Toyota apparently has.

    Big Oil companies, at least most of them, will diversify more and more into sustainable energy supply as time goes along, as fossil fuel supplies become ever more scarce and ever more expensive. And the few that don’t… well, good riddance to ’em.

    1. Brian says:

      “The combination of Saft and Total will enable Saft to become the Group’s spearhead in electricity storage. The acquisition of Saft is part of Total’s ambition to accelerate its development in the fields of renewable energy and electricity”

      Sounds like they want to sell systems and make a ton of $$. For 1.1 billion this might look like a steal in just a few years.

  4. Anon says:

    Maybe Total was confused, and thought Saft was a SAFE investment?

  5. Bryan says:

    Remember that Total is the controlling shareholder in SunPower as well.
    They have solar modules and onw perhaps batteries. It will be interesting where they go with this.

    1. Marc says:

      +1
      Total took a big step in renewables by buying 2/3rd of SunPower 5 years ago and still lets them run independently

    2. sveno says:

      Yes, for me this deal is a good omen.

      Then again – how many patents and mouths have been bought up by oil companies to kill off ideas? Car manufacturers and oil companies have walked hand in hand for the entire time, remember.

  6. Mister G says:

    As long as Tesla remains independent the transition to EVs and renewable energy will not be terminated by fossil fuel industry.

  7. Rick (no, not that Rick) says:

    All conspiracy theories aside, the economics are rather simple. Oil will rule until something else is cheaper.

    1. Eco says:

      Oil will rule until we stop giving them $5 Trillion per year in subsidies and force them to pay for their health, environmental, and climate damages!

    2. Speculawyer says:

      Well, with the Chevy Bolt and, more importantly, the Tesla Model 3 . . . we do have something cheaper: electricity.

      Oil is actually pretty expensive. It is so expensive that almost no one uses it to generate electricity (except oil states and islands with no other sources). But the advantage oil has is that it is very energy dense and a liquid at ambient temperatures. That makes it an ideal transportation fuel since it packs a lot of energy for low weight and it is easily transported and loaded into vehicles. Electricity is more efficient but difficult to store . . . but we may be at the crossing point in the next few years.

  8. Speculawyer says:

    It definitely was an eyebrow raising acquisition. Total has definitely been one of the more progressive oil companies.

  9. internete says:

    Oil companies are zombies unable to produce interesting histories…
    But they have so much money to buy a lot of battery companies and patents and stimulate web comments…
    They will die killing !!