By Geraldine Amiel
PARIS--Total SA (TOT) entered exclusive talks with a consortium
led by Electricité de France SA (EDF.FR) to sell its natural-gas
transport and storage unit TIGF, for a price of more than two
billion euros ($2.72 billion), two persons with direct knowledge of
the matter said Tuesday.
TIGF was put up for sale by the oil and gas major last autumn as
part of a wider strategy to sell as much as 20 billion euros
($26.76 billion) worth of assets by 2015 to help boost its cash
flow, and finance substantial investments.
TIGF was initially valued at between 2.5 billion euros and 3
billion euros, according to analyst estimates, but the recent fall
in gas prices led estimates lower.
The unit attracted much interest as the gradual demise of
nuclear energy in Europe following the Fukushima catastrophe at a
time of stricter carbon-emission standards rendered natural gas the
best option. Gas also allows for consistent power production when
renewable energies, currently being developed all around Europe,
depend on the weather, making them only "intermittent" and unable
ensure a stable level of electricity offer, making a "back-up"
power source necessary.
Initially, seven companies or consortia had expressed interest
in TIGF but three weeks before the deadline to submit offers, which
was set on Feb. 4, only two bidders remained in the race.
The consortium led by EDF (EDF.FR) includes the Government of
Singapore Investment Corp., and Italian energy company Snam SpA
(SRG.MI).
CDC Infrastructure, a fully owned subsidiary of Caisse des
Depots, led the second consortium that comprises AXA Private
Equity, Credit Agricole SA's (ACA.FR) insurance unit Predica, Abu
Dhabi Investment Authority and Belgium's natural-gas operator
Fluxys Belgium SA (FLUX.BT).
Total was keen to get the transaction done ahead of its
fourth-quarter earnings release Feb. 14, as investors are
scrutinizing its compliance with its own financial commitments.
Write to Geraldine Amiel at geraldine.amiel@dowjones.com
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