Total, a French oil and gas giant with a $120 billion market cap, just offered to acquire French battery specialist Saft for $1.1 billion. That represents a 38 percent premium over Saft's recent closing stock price. The supervisory board of Saft has approved the friendly acquisition offer.

Patrick Pouyanné, CEO of Total, said the offer is part of his firm’s goal to “accelerate its development in the fields of renewable energy and electricity, initiated in 2011 with the acquisition of SunPower." In 2011 Total acquired a controlling interest in SunPower, the maker of high efficiency solar modules and project developer, for around $2.3 billion.

Yann Duchesne, chairman of Saft’s supervisory board, said he was “delighted with this rapprochement."

GTM just had a conversation with Saft’s Michael Lippert, grid product marketing manager. He said, "We are a nearly 100-year-old public French company, quoted on the Paris Exchange stock market. We are about 4,000 people worldwide, and 750,000,000 euro turnover."

"Our expertise and our business is in battery solutions. We are a developer, a manufacturer, and we are commercializing advanced battery systems for the industry," he continued. Saft's technology includes nickel cadmium and nickel metal hydride, as well as lithium primary cells. "These are relatively small cells that go into metering such as gas and electricity meters, for example, and electronic devices," said Lippert.

Saft is also involved in the space and defense industries. "You can find [our batteries] on satellites, and a lot of military vessels, vehicles and equipment." Saft was recently chosen to provide batteries and electronics for an electromagnetic railgun for the U.S. Navy. "We have a leading position in all worldwide aircraft batteries. You will find us in telecom infrastructure as well," added Lippert.

"We are not in the, let's say, the standard electric-vehicle market."

But Saft is certainly involved in grid-scale energy storage.

"Our specific point is that we are developing and manufacturing our own technology. We are customizing batteries for selected and dedicated niche applications. We are usually very close to our customers and doing things for them. We are developing a battery for satellites. We are developing a battery for a given airbus."

He notes, "We spend close to 10 percent of our turnover in research and development to remain in the forefront of technology development and innovation."

Despite the large turnover, Saft is more of specialty and niche supplier. "We are not in consumer-type products. We are not in the commodity markets. Our business model is not to produce at the lowest cost with the highest volume, batteries that go into a typically consumer devices all over the world, or into the upcoming market of electric vehicles. We don't have the scale and the size for that."

"We are looking more for advanced or high-end applications where we can provide a lot of added value. Our added value lies in the understanding of the customer's need and the application, and our ability to provide very specific solutions. Which does not mean that we are only doing very small quantities and very expensive things. Of course, we do quite expensive things -- you imagine a battery for a satellite, and technical requirements that are very, very high and require quite sophisticated processes behind it."

"Just to give you another example," he continued, "We are providing lithium-ion batteries, for a telecom operator -- Reliance in India -- and we are one of the major suppliers to this operator that is rolling out its 4G network in India."

"Again, the specific point is that we do everything from the electrode. We develop our own electrodes, our own cells, our models, and we develop complete systems, including those for energy storage, and we do, of course, the installation and commissioning and servicing of our systems," Lippert said. "We delivered our first megawatt continuous storage system in 2012, and we have installed more than 80 megawatts of grid-connected energy storage systems around the world."

"We believe that energy storage is, or will be, a part of our...electricity landscape. [We envision it as] the fourth component of the electricity system besides generation, transmission and distribution -- driven, of course, by renewable energy."

According to the The Wall Street Journal, Total is looking to "create a gas, renewable energy and power trading unit, a move designed in part to diversify the company’s revenue away from highly volatile oil prices."

Ben Kellison, director of grid research at GTM said, "This is an interesting move coming a few months after Statoil committed $200 million to fund wind, energy storage and grid edge technology companies. Low oil prices have lowered returns and led many oil companies to slash capital budgets. Pressure to keep earnings up amid oil price uncertainty seem to be driving these companies to find other places to invest capital, namely into the smaller, but faster growing market for renewables and storage."

The combination of a world-class battery supplier with a leading solar developer under the roof of an oil giant with low-cost capital and international reach is one to watch.