PARIS, FRANCE: TotalEnergies has agreed to sell its Canadian assets to Suncor Energy for approximately C$5.5 billion ($4.1 billion), following unsolicited offers received after the announcement of its project to spin off the assets.

Under the signed agreement, Suncor Energy would acquire the entirety of the shares of TotalEnergies EP Canada Ltd for a consideration including a C$5.5 billion cash payment at closing (about US$4.1 billion) and additional payments that could reach a maximum of C$600 million (about US$450 million) under specific conditions. The amount is comparable to the C$5 to 6 billion valuation at initial listing of the spin-off company had the spin-off project concluded, as estimated by TotalEnergies’ financial advisors.

The Board of Directors of TotalEnergies has considered this transaction, which is more straightforward in its execution than the planned spin-off, to be competitive enough to represent an alternative for the benefit of the Company and its shareholders. As a result, the board has decided to follow up on the offer.

The transaction is subject to the waiver of TotalEnergies EP Canada Ltd’s partners pre-emption rights and customary closing conditions, notably the required approval from public authorities. TotalEnergies and Suncor Energy target closing by the end of the third quarter of 2023.

Taking into account the future proceeds of this divestment, the Board of Directors has decided to allocate at least 40% of the cash flow (CFFO) generated by TotalEnergies in 2023 to its shareholders. This is at the high end of the 35-40% guidance announced in 2022. The Board of Directors will make this decision upon transaction closing, after dialogue with shareholders.

TotalEnergies announced its intention to spin off its Canadian assets in February 2022. The spin-off was expected to allow TotalEnergies to focus on its core businesses and further accelerate its transformation into a broad energy company. The sale of its Canadian assets will enable TotalEnergies to reduce its debt and free up resources to invest in low-carbon businesses.

The Canadian assets that were planned to be included in the spin-off consist of interests in the Fort Hills oil sands mining and processing operation, the Surmont oil sands project, and the Northern Lights project, which aims to store CO2 in offshore geological formations.

This transaction comes as the global energy industry is transitioning towards cleaner and more sustainable energy sources. TotalEnergies has been actively investing in renewable energy, energy storage, and carbon capture technologies in recent years.

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