LA DEFENSE (dpa-AFX) - UGI Corp. (UGI) Wednesday said its French subsidiary has agreed to buy energy giant Total SA's (TTA.L, TTFNF.PK, TOT) liquid petroleum gas distribution business in France for as much as 400 million to 450 million euros.
The acquisition of the unit is expected to close during the first half of 2015, subject to regulatory approvals, consultation regulations and customary closing conditions.
Pennsylvania-based UGI said it will fund the transaction using cash in hand and debt. Chief Executive John Walsh said the company expects the unit to contribute to earnings in the first full year.
"We look forward to adding Total's French LPG business to our existing footprint in France, extending the reach of our business and expanding our residential and commercial customer base across all regions of the country. The acquisition of this high-quality business reaffirms our commitment to add value for our shareholders through profitable growth in Europe," Walsh added.
Total's French LPG business distributed over 265 million retail gallons of LPG in 2013, serving residential, commercial, industrial and autogas customers. This compares to about 250 million retail gallons distributed by UGI's Antargaz in France.
Total has been divesting assets as part of its ongoing process of optimizing its upstream portfolio to focus its internal resources on as-yet undeveloped resources. Total's Chief Executive Officer Christophe De Margerie has targeted asset sales of $15-20 billion by 2015. In May, Total had sold its 10 percent stake in Azerbaijan's Shah Deniz field to Turkey's state-owned energy company for $1.5 billion, which brought the total assets sales since 2012 to nearly $16 billion.
UGI is currently trading at $50.27, down $0.26 or 0.51\%, on the NYSE. TOT is currently trading at $72.28, down $0.49 or 0.67\%.