September 19, 2017 / 7:06 AM / in a month

Total steps up renewables drive with EREN, GreenFlex deals

PARIS (Reuters) - Oil major Total has stepped up its expansion into renewables with investments in solar and wind energy producer EREN RE and energy efficiency firm GreenFlex.

Striking union workers of French oil giant Total gather in front of the oil refinery to protest the the governments proposed labor law reforms in Donges, France, May 26, 2016. REUTERS/Stephane Mahe

Bruised by pressure on oil prices over the last two years, Europe’s biggest oil companies have been intensifying their push into renewable energy to seek new sources of future revenue.

Total said it was buying a 23 percent stake in renewables company EREN RE for 237.5 million euros ($285 million), and could later acquire full control of the business.

It is also acquiring GreenFlex, which specializes in finding ways to use energy more efficiently and forecasts 2017 revenues of more than 350 million euros.

Total did not give a value for that deal, but Philippe Sauquet, president of Total’s gas, renewables and power units, said the group wanted GreenFlex to be the “linchpin of its growth in the energy efficiency industry in Europe.”

The EREN and GreenFlex deals also come a month after Total bought Maersk’s oil and gas business in a $7.5 billion deal to boost output at its core division.

“EREN RE’s momentum will allow us to accelerate our growth in solar energy and move us into the wind power market,” Sauquet said in a statement.

“The agreement with EREN RE is a major step towards our objective of achieving 5 GW (gigawatts) of installed capacity in five years,” he added.

Total shares were up 0.5 percent in mid-session trade.

“It’s a sensible deal, and Total also has the benefit of paying out a dividend yield of around 5.5 percent,” said Clairinvest fund manager Ion-Marc Valahu, who owns Total shares.

Analysts at Jefferies said in a note that Total was withstanding a tricky economic environment and doing well in terms of “rejuvenating” its portfolio.

Last year, Total’s start-up ventures unit bought a stake in wind turbines company United Wind, while it also announced plans to install solar panels at 5,000 service stations.

Reporting by Sudip Kar-Gupta; Additional reporting by Sabina Zawadzki; Editing by Mark Potter and Susan Fenton

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