French energy giant Total SA will buy a 37.4% stake in Indian gas distribution company Adani Gas, 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 and Shell, 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 rose 0.3% in early trade