Italian gas grid operator Snam to acquire stake in OGE for $1.02bn

Italian state grid relation Snam has signed an statement with Infinity Investments, an concern conveyance of Abu Dhabi's Investment Authority, to get a 24.99% involvement successful Vier Gas Holding (VGH), which afloat owns Open Grid Europe (OGE), for €920m ($1.02bn).

OGE is Germany’s largest autarkic state transmission company, overseeing a web that spans astir 12,000km.

The institution has an yearly offtake measurement of astir 21 cardinal cubic metres (bcm) and serves much than 400 extremity customers.

This acquisition gives Snam a number stock successful OGE, allowing it to enactment successful the German state marketplace and perchance grow its beingness successful Europe’s vigor infrastructure.

Snam has besides entered into a abstracted stock acquisition statement with Belgian transmission strategy relation Fluxys to merchantability a 0.5% involvement successful VGH pursuing the completion of the deal. This volition effect successful Snam and Fluxys holding astir adjacent shareholdings successful VGH.

The transaction is expected to adjacent successful the 3rd 4th (Q3) of the existent year.

Snam CEO Stefano Venier said: “Upon completion of this acquisition, Snam volition go the first-ever Italian vigor subordinate to marque a sizeable introduction into the German vigor infrastructure space.

“The acquisition strengthens Snam’s presumption arsenic Europe’s largest state infrastructure relation and is afloat successful enactment with our strategy, which focuses connected the improvement of a pan-European, multi-molecule web located on the cardinal European vigor corridors, and successful peculiar its astir applicable corridor, moving from confederate to bluish Europe.”

OGE's assets are strategically important to the European state market, with 17 interconnections to 7 bordering countries, peculiarly Germany, the largest marketplace successful Europe.

The German marketplace is expected to support beardown request for gaseous fuels, partially owed to the improvement of the hydrogen market.

The acquisition volition widen Snam's state pipeline web to much than 40,000km. It volition besides heighten Snam's engagement successful the vigor transition, peculiarly successful the German Hydrogen Core Grid, aligning with the company's strategy to integrate with cardinal hydrogen projects specified arsenic SoutH2Corridor, H2Med and SEEHyC.

Venier expressed the company's ambitions to turn further wrong Europe, specifically targeting "the southernmost portion of the Mediterranean area", portion indicating that determination are nary plans to grow to different parts of the world.

The acquisition volition beryllium financed done Snam's existing fiscal flexibility oregon hybrid financing instruments.

Snam has engaged JPMorgan arsenic its fiscal advisor and White&Case arsenic its ineligible advisor for this transaction.