French energy giant Total to buy 37.4% stake in India's Adani Gas

French energy giant Total to buy 37.4% stake in India's Adani Gas
A logo of French oil company Total is seen at an office building in La Defense business district in Courbevoie near Paris, France, October 12, 2019. REUTERS/Regis Duvignau/Files -
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BENGALURU (Reuters) – French energy giant Total SA <TOTF.PA> will buy a 37.4% stake in Indian gas distribution company Adani Gas <ADAG.NS>, as it looks to capitalise on the South Asian country’s push for cleaner sources of energy.

Total is the third foreign oil major to enter India’s gas sector after BP Plc <BP.L> and Shell <RDSa.L>, and it comes at a time when India is spending heavily to cut its carbon emissions.

Indian Prime Minister Narendra Modi has set a target to more than double the share of gas in the country’s energy basket to 15% by 2030.

Total will buy up to 25.2% in Adani Gas from public shareholders at 149.63 rupees per share, representing an 8.7% premium to the stock’s last close and valuing the stake at 41.47 billion rupees ($584.80 million).

It will buy the remaining 12.2% stake from the Adani family, according to stock exchange filings.

After the deal, the Adani family and Total will each hold 37.4% stake in Adani Gas, while public shareholders will own the remaining 25.2%.

Total and Adani will also establish a joint venture to market liquefied natural gas (LNG) in India and Bangladesh.

Shares of Adani Gas soared 18.4% on Monday after the deal was announced, while the broader NSE index <.NSE> rose 0.3% in early trade.

(Reporting by Chris Thomas in Bengaluru and Nidhi Verma in New Delhi; Editing by Subhranshu Sahu)

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