Brazil: TotalEnergies Sells Its Fuel Distribution Activities to SIM Distribuidora

Rhea-AI Summary

TotalEnergies has announced the sale of its fuel distribution activities in Brazil to SIM Distribuidora, a Brazilian company owned by Grupo Argenta. The transaction includes:

• A network of about 240 filling stations
• Several storage facilities for petroleum products and ethanol

This move aligns with TotalEnergies' selective strategy in Marketing & Services, focusing on core geographies with significant market share positions. The company will retain its lubricants blending and distribution activities in Brazil. The acquisition is subject to approval by relevant authorities.

Positive

• Strategic alignment with focus on core geographies
• Retention of lubricants blending and distribution activities in Brazil

Negative

• Reduction in market presence in Brazil's fuel distribution sector

Insights

Financial Analyst

TotalEnergies' decision to divest its fuel distribution activities in Brazil aligns with its strategic focus on core geographies where it holds significant market share. This move involves the sale of approximately 240 filling stations and several storage facilities to SIM Distribuidora, a subsidiary of Grupo Argenta.

While the financial terms aren't disclosed, this transaction is likely to have a minimal impact on TotalEnergies' overall operations, given Brazil's relatively small contribution to the company's global portfolio. The retention of lubricants blending and distribution activities suggests a continued, albeit reduced, presence in the Brazilian market.

For investors, this divestment represents a strategic realignment rather than a significant financial event. It may lead to a slight improvement in capital efficiency and allow for reallocation of resources to markets with higher growth potential or stronger competitive positions.

Market Research Analyst

The sale of TotalEnergies' fuel distribution network in Brazil to SIM Distribuidora is part of a broader trend in the oil and gas industry, where major players are optimizing their downstream portfolios. This move reflects the company's strategy to focus on markets where it can achieve scale and efficiency.

Brazil's fuel market is highly competitive, with strong local players and state-owned Petrobras dominating. By exiting this segment, TotalEnergies can redirect capital and management attention to more promising markets or emerging energy sectors, such as renewables.

For the Brazilian market, this transaction could lead to further consolidation, potentially benefiting local players like Grupo Argenta. Investors should monitor how this shift affects market dynamics and whether it signals a broader trend of international oil companies reducing their downstream exposure in emerging markets.

PARIS--(BUSINESS WIRE)-- Regulatory News:

TotalEnergies (Paris:TTE) (LSE:TTE) (NYSE:TTE) has signed an agreement to sell its fuel distribution activities in Brazil to SIM Distribuidora, a Brazilian company. The transaction involves a network of about 240 filling stations and several storage facilities for petroleum products and ethanol.

SIM Distribuidora, one of the recognized players of the fuel distribution business in Brazil, belongs to Grupo Argenta, which has more than 500 service stations, lubricants and aviation activities.

This sale reflects the selective strategy of TotalEnergies in Marketing & Services in the retail network business focussed on core geographies with significant market share positions. The Company will retain its lubricants blending and distribution activities in Brazil.

The acquisition remains subject to authorization by the relevant authorities.

***

About TotalEnergies in Brazil

TotalEnergies has been operating in Brazil for almost 50 years, through five subsidiaries, and today employs more than 3,500 people in its business segments, in Exploration & Production, gas, renewable electricity (solar and wind), lubricants and chemicals. TotalEnergies' Exploration & Production portfolio currently includes 11 licenses, of which 4 are operated. In 2023, the Company's average production in the country will reach approximately 140,000 barrels of oil equivalent per day. TotalEnergies is investing in the growth of the renewable energy segment in Brazil. In October 2022, the company entered into a partnership with Casa dos Ventos, Brazil's leading renewable energy player, to jointly develop a 12 GW renewable energy portfolio.

About TotalEnergies
TotalEnergies is a global integrated energy company that produces and markets energies: oil and biofuels, natural gas and green gases, renewables and electricity. Our more than 100,000 employees are committed to provide as many people as possible with energy that is more reliable, more affordable and more sustainable. Active in about 120 countries, TotalEnergies places sustainability at the heart of its strategy, its projects and its operations.

@TotalEnergies TotalEnergies TotalEnergies TotalEnergies

Cautionary Note
The terms “TotalEnergies”, “TotalEnergies company” or “Company” in this document are used to designate TotalEnergies SE and the consolidated entities that are directly or indirectly controlled by TotalEnergies SE. Likewise, the words “we”, “us” and “our” may also be used to refer to these entities or to their employees. The entities in which TotalEnergies SE directly or indirectly owns a shareholding are separate legal entities. This document may contain forward-looking information and statements that are based on a number of economic data and assumptions made in a given economic, competitive and regulatory environment. They may prove to be inaccurate in the future and are subject to a number of risk factors. Neither TotalEnergies SE nor any of its subsidiaries assumes any obligation to update publicly any forward-looking information or statement, objectives or trends contained in this document whether as a result of new information, future events or otherwise. Information concerning risk factors, that may affect TotalEnergies’ financial results or activities is provided in the most recent Universal Registration Document, the French-language version of which is filed by TotalEnergies SE with the French securities regulator Autorité des Marchés Financiers (AMF), and in the Form 20-F filed with the United States Securities and Exchange Commission (SEC).

View source version on businesswire.com: https://www.businesswire.com/news/home/20241018392249/en/

TotalEnergies

Media Relations: +33 (0)1 47 44 46 99 l presse@totalenergies.com l @TotalEnergiesPR

Investor Relations: +33 (0)1 47 44 46 46 l ir@totalenergies.com

Source: TotalEnergies SE

FAQ

What assets is TotalEnergies selling in Brazil?

TotalEnergies is selling its fuel distribution activities in Brazil, including a network of about 240 filling stations and several storage facilities for petroleum products and ethanol.

Who is buying TotalEnergies' fuel distribution activities in Brazil?

SIM Distribuidora, a Brazilian company belonging to Grupo Argenta, is buying TotalEnergies' fuel distribution activities in Brazil.

Will TotalEnergies (TTE) maintain any operations in Brazil after this sale?

Yes, TotalEnergies (TTE) will retain its lubricants blending and distribution activities in Brazil after the sale of its fuel distribution activities.

What is the strategic reason behind TotalEnergies' (TTE) sale of its Brazilian fuel distribution activities?

The sale reflects TotalEnergies' (TTE) selective strategy in Marketing & Services, focusing on core geographies with significant market share positions.