French oil and chemicals giant Total has signed an agreement to acquire French battery producer Saft for about $1.1 billion.
Saft produces batteries based on nickel and lithium-ion chemistry for applications in industry, transport, consumer electronics, and the military. It generated profits in 2015 of $14.8 million from sales of $825 million.
Saft has more than 4,100 employees across 19 countries and 14 manufacturing sites, of which four are in the U.S. Saft says it began a “transformational” initiative in November 2015 to reorient the firm to be more customer-focused.
The French battery firm is just outside the world’s top 10 largest battery producers. The acquisition marks a major expansion into the battery sector for Total. It currently owns Stem and Aquion Energy, two much smaller battery technology firms.
“The acquisition of Saft is part of Total’s ambition to accelerate its development in the fields of renewable energy and electricity,” says Patrick Pouyanné, chairman and CEO of Total. Total plans to position Saft in its newly formed gas, renewables, and power division.
Saft boasts a strong research program with annual R&D spending of about $75 million, an R&D team of more than 400, and intellectual property covering 147 patent families.
“Although Saft’s technologies are certainly not the best priced nor highest performing in mainstream applications,” the company has “excelled at designing for niches like military and aerospace,” says Cosmin Laslau, senior analyst for technology market research firm Lux Research. Additionally, the firm has gained some initial traction in the emerging stationary energy storage space, Laslau says.
“Buying Saft is a good, well-timed move. Now the hard work begins to turn the company around, focus it toward future growth, and integrate it with Total’s other plays in the future of energy, like solar,” Laslau adds.