Gas Natural Fenosa offloads Italian interests
Friday, Oct 20, 2017
Gas Natural Fenosa has agreed to sell its Italian gas distribution business to local gas grid operator 2i Rete Gas, in a deal said to be worth 727 million euros (US$856 million).

It will also pass its gas and electricity supply operations in the country to Edison, in a separate sale worth 193 million euros (US$227 million).

Both sales had been widely anticipated and reported in the Italian press, and were said to have been approved earlier in the month, but the Spanish utility only announced on October 13 that the final arrangements had been agreed. In addition to direct income from the two sales, Gas Natural also said it anticipated that the transaction would generate after-tax capital gains in the region of 190 million euros (US$224 million). This would bring the combined overall worth of the two deals’ to more than 1.1 billion euros (US$1.3 billion).

Edison is an Italian subsidiary of French utility giant EDF, while 2i Rete Gas is controlled by the Italian infrastructure fund F2i. Both companies are headquartered in Milan.

As part of its ongoing growth strategy, 2i Rete Gas – Italy’s second-biggest grid operator – will acquire 100% of both of Gas Natural’s gas distribution and services companies in Italy: Gas Natural Italia and Nedgia. Its newly acquired assets will include a gas distribution network covering approximately 7,300 km, mostly located in the south of the country. This will add to the almost 60,000 km of distribution grid serving almost 2,000 towns and cities that the company already operates in the country and elsewhere in Western Europe.

Edison’s purchase will see it gain a gas and power retail business with more than 400,000 customers.

The completion of the two transactions is expected to happen in the first quarter of 2018, and both remain subject to the usual conditions and approval by anti-trust authorities, Gas Natural said.

The moves are part of the Spanish company’s strategy of offloading all of its activities in Italy. It had been operating in the country since 2002, but its businesses there are only thought to generate around 1% of its global core earnings.

Earlier in the month, Gas Natural also announced that it was relocating its headquarters from Barcelona to Madrid, while the legal uncertainty and unrest over the status of the Catalonia region continued.

This NewsBase commentary is from our EurOil publication. To sign up for your free trial, click this link:

Read more NewsBase top stories via this link:

Find out more about European Oil and Gas from NewsBase