Total has found a buyer for its domestic liquefied natural gas (LPG) business, but is having to settle for far less than had been previously touted in the market.
US utility UGI has reached an agreement in principle with the French supermajor to buy Totalgaz for between €400 million ($546 million) and €450 million, it said on Wednesday.
Total also confirmed that it was in exclusive negotiations with UGI on a possible deal.
UGI chief executive John Walsh said he expects the deal to be funded through a combination of cash and debt.
Total president of marketing & services Philippe Boisseau commented: “Within the specific context of the European LPG distribution market, Totalgaz will be able to pursue its industrial and commercial development backed by a leading industrial company. UGI has a long-term strategic vision, with a strongly expanding presence in European markets.”
Earlier this year, Total was said to have gained interest from investment funds such as First Reserve, PAI Partners, Pamplona and Platinum after putting Totalgaz on the block.
French daily newspaper Les Echoes reported that the company had set its sights on getting around €700 million for Totalgaz.
TotalGaz employs about 500 staff in France and, as well as LPG, is involved in the distribution of butane and propane.