Macquarie led consortium buys European gas network in 3.2bn deal
In a 3.2 billion euros ($4.1 billion) deal, a consortium led by Australian investment bank Macquarie Group has bought the Open Grid Europe gas distribution network from Germany's largest utility E.On.
The consortium includes Macquarie's European Infrastructure Fund 4, Abu Dhabi's Infinity Investments, British Columbia Investment Management Corp. from Canada and the capital investment unit of German reinsurer Munich Re, said E.ON in a written statement.
E.ON said it expects the transaction to close in the third quarter.
Open Grid Europe (OGE) runs Germany's largest gas distribution network, stretching about 12,000 kilometres, which is the main transport system for gas supply to Russia and Norway. It was unbundled from its parent company in 2010 to comply with EU requirements.
The deal announced on Wednesday brings E.ON's tally of divestments to more than 12 billion euros. Impacted by Germany's plans to stop nuclear power generation by 2022, E.On is targeting raising 15 billion euros by the end of 2013 through sale of assets to help it reduce a debt pile of 37.6 billion euros at the end of March.
The fund will also help E.On expand foray into growth markets, including Turkey and India, where E.ON is talking to potential partners.
DZ Bank analyst Hasin Senguel said the sale allows E.ON to deleverage further without the loss of high earnings. He pointed out that the sale price was almost a third above expectations.
"OGE is an extraordinary and very well run company in a stable and regulated environment," Edward Beckley, head of Macquarie Infrastructure and Real Assets in Europe, said in a statement.
The Australian investment bank in 2010 led a consortium that purchased RWE, Germany's second largest energy firm.
Analysts expect the sale of OGE to be approved by regulators, as the EU commission has urged large utilities for years to divest their networks, leading E.ON to sell its high-voltage grid to Dutch network operator TenneT for 1.1 billion euros in 2009.
Source: Middle East News.Net
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