TotalEnergies’ plan for a dual listing in the United States raises questions about its underlying motivations and financial implications. While the company emphasizes that “TotalEnergies is already listed in New York” and that it wishes to “convert the American Depositary Receipts, which currently form the basis of [its] listing in the United States, into common stock,” this decision is nonetheless a strategic one.

Dual listing allows a company to be listed directly on two stock exchanges. In the case of TotalEnergies, this would no longer involve maintaining American Depositary Receipts (ADRs)—currently used to access the U.S. market—but rather listing its common shares on the New York Stock Exchange while maintaining their listing on Euronext Paris. This would allow the same shares to be traded in euros in Europe and in dollars in the United States.

Dual listing

The immediate goal of the project is to convert the ADRs, which represent approximately 9% of the company’s capital, into common stock listed on the New York Stock Exchange (NYSE). ADRs are negotiable certificates issued by a U.S. bank that represent ownership of a share in a foreign company and allow those shares to be traded on U.S. markets. Converting the ADRs would allow U.S. investors to purchase TotalEnergies securities directly, without going through intermediary vehicles. This reduces intermediation costs and improves liquidity.

This shift is all the more plausible given that U.S. investors already hold nearly 40% of TotalEnergies’ capital in 2024, compared with 25.3% held by French shareholders. The share held by U.S. investment funds is a key factor here, particularly BlackRock, which , with a 6.1% stake, is the group’s largest shareholder. Furthermore, the valuations of major U.S. companies generally remain higher than those of their European counterparts. TotalEnergies shares are thus trading in Paris at about 3.5 times EBITDA (interim financial statements, ed.), compared to 6.5 times for ExxonMobil. In short, while maintaining a listing in Paris, the company’s stock market “center of gravity” would automatically shift.

Arbitration between Paris and New York

Arbitrage between the NYSE and Euronext Paris would, in theory, involve buying shares at a lower price on one market (Paris) and then reselling them at a higher price on another (New York), capitalizing on the difference in valuation. In practice, however, this strategy is very difficult for a company like TotalEnergies to implement. Several obstacles stand in the way:

• There are settlement delays between the two markets, preventing immediate execution.

• Tax laws and regulations vary by jurisdiction, making the transfer of shares more complex.

• Time zones and market structures make it difficult to synchronize operations.

• Market volume and liquidity are not strictly equivalent on the two exchanges.

• Share buyback programs are subject to strict rules: maximum price, authorized time frame, and stated purposes (compensation, cancellation, etc.).

TotalEnergies is therefore not legally permitted to buy back large quantities of its shares in Paris and resell them in a different form in New York. In other words, the dual listing is intended less to exploit immediate arbitrage than to create direct and stable access to the U.S. market, with the goal of attracting investors, improving the stock’s liquidity, and, ultimately, achieving a higher valuation.

Compliance

Technically, this transfer requires compliance with the rules of the U.S. Securities and Exchange Commission (SEC):

• Financial reporting in accordance with the country's accounting standards,the United States Generally Accepted Accounting Principles (US GAAP).

• A strict enforcement of the Sarbanes-Oxley Act, which requires all public companies to report on their internal accounting controls to the SEC.

• Appointing a legal representative in the United States.

• Adapting internal structures to this new regulatory and stock market environment.

The example of TotalEnergies is similar to that of STMicroelectronics, which has been dual-listed (in Paris and on the NYSE) since its initial public offering in 1994. In the 2000s, trading volume gradually shifted to New York due to a more favorable valuation and a shareholder structure influenced by U.S. investment funds.

Maximizing Shareholder Value

The decision to pursue dual listing is based on a philosophy that has been firmly established since the liberal revolution of the 1980s, spearheaded by Milton Friedman and the Chicago School: the maximization of shareholder value.

TotalEnergies stands out with a return on capital employed of 19%, the highest among all major oil companies. The group offers exceptional returns for its shareholders: a dividend of 3.22 euros per share in 2024, representing a 7% increase. The average return over the past five years is 5.74%, compared with 3% for all CAC 40 stocks.

Its Chairman and CEO, Patrick Pouyanné, defended the decision to pursue a sustained dividend policy during his speech at the group’s annual shareholders’ meeting on May 23, 2025: “I also know that what matters most to you, based on these discussions, is the long-term sustainability of our shareholder return policy—and in particular, the dividend.” Let me reassure you right away: TotalEnergies has not cut its dividend in over forty years—not even when your company has weathered severe crises such as the one linked to the COVID-19 pandemic—and that is not going to change today or tomorrow.”

The resolutions on the approval of the financial statements and the appropriation of net income submitted to the general meeting on May 23, 2025, received more than 99% of the votes in favor. These results reinforce management’s confidence in its course of action, which is consistent with the principles of corporate governance.

Performance Bonus

From this perspective, a listing in New York is all the more attractive because it comes with a valuation premium. In 2024, TotalEnergies ADRs rose 8.6% in dollars, compared with 1.4% for the stock in Paris.

The gains in market value generated by a dual listing are well established. In a study published in 2010, the Federal Reserve Bank of New York demonstrated that publicly traded companies that list on a more prestigious market (such as Wall Street) “experience significant increases in market value during the five years following their initial public offering.”

Academic literature shows that cross-listing leads to increased coverage by financial analysts, particularly those in the United States. This enhanced visibility improves the dissemination of information, reduces information asymmetry between the company and investors, and thereby strengthens market confidence. It directly influences the cost of capital: investors are willing to finance the company at a lower rate because they perceive less risk. In other words, a company that is more closely monitored, more transparent, and more highly valued in the markets can secure financing on favorable terms.

European Green Deal

TotalEnergies justifies its project on economic and financial grounds. However, this repositioning is taking place against the backdrop of a tense European regulatory environment, marked by increasing demands for transparency, sustainability, and consideration of stakeholders beyond just shareholders. This approach, inspired by the so-called “stakeholder value” framework, is promoted, in particular, by R. Edward Freeman (1984).

This trend is now being called into question. The debate centers on the Omnibus legislation, which seeks to relax certain requirements of the ESG framework—a product of the European Green Deal—that has often been criticized for its potential impact on the competitiveness of European companies.

As part of the Green Deal, the Corporate Sustainability Reporting Directive and the ESRS E1 standards (European Sustainability Reporting Standards) will enhance transparency for large companies with more than 1,000 employees—according to the European Commission’s latest proposal—regarding climate risks and their environmental impacts. In this regard, these directives provide additional tools for stakeholders seeking to scrutinize certain strategies—particularly those related to climate change—of large companies such as TotalEnergies.

ESG and a Low-Carbon World

According to TotalEnergies' last two sustainability reports, the share of the group's sustainable investments (as defined by the European Green Taxonomy established under the Green Deal) fell to 20.9% in 2024, down from 28.1% in 2023.

At the last annual shareholders’ meeting, Patrick Pouyanné defended this approach, noting in particular: “Until we have built a global energy system that is carbon-free, reliable, and affordable, we will have to continue investing in traditional energy sources.”

By partially shifting its center of gravity toward the United States, TotalEnergies would consolidate de facto its connection to a The U.S. financial market is generally less cautious when it comes to ESG. So, during his Senate hearing in April 2024, Patrick Pouyanné emphasized: “Partly due to the weight of environmental, social, and governance criteria in Europe, TotalEnergies’ European shareholder base is shrinking […] while U.S. shareholders are buying TotalEnergies.”