TotalEnergies acquires 50% of fifth largest US renewable energy company

French energy major TotalEnergies on Wednesday announced an agreement with Global Infrastructure Partners (GIP) to acquire 50% of Clearway Energy Group (CEG), the fifth largest US renewable energy player.

The agreement marks the French giant’s largest US renewables energy stake and consolidates TotalEnergies’ strategy of pursuing the acquisition route to gain a strong foothold into the fast-growing renewables energy sector, diversifying away from hydrocarbon-based activities.

CEG is a developer of renewables projects and controls and owns 42% of economic interest of its listed subsidiary, Clearway Energy Inc. (CWEN), into which projects are dropped when they reach commercial operation, TotalEnergies said in a statement.

With this acquisition, TotalEnergies will gain a major position in the US renewable energy and storage market, one of the top three renewable markets in the world.

The San Francisco-headquartered Clearway has 7.7 GW1 of wind and solar assets in operation through its listed subsidiary CWEN and has a 25 GW pipeline of renewable and storage projects, of which 15 GW are in an advanced stage of development.

As per the transaction modalities, GIP will receive $1.6 billion in cash and an interest of 50% minus one share in the TotalEnergies subsidiary that holds its 50.6% ownership in SunPower Corporation, the company said in a statement.

The transaction takes into account valuations of $35.1 per share for CWEN and $18 per share for SunPower.

As part of the partnership, TotalEnergies will help boost Clearway’s growth prospects by providing CWEN in the US with access to its power trading capabilities and will give it priority on the farm down of its own developed projects, the company said.

The acquisition brings TotalEnergies’ renewable portfolio in the US to more than 25 GW and contributes to the objective that the United States account for at least 25% of the company’s global target of 100 GW by that time.