Italgas, Italy’s leading gas distributor, has signed a deal to acquire rival 2i Rete Gas for 5.3 billion euros ($5.8 billion), including debt. This acquisition, one of the largest in the sector, represents a significant step in the consolidation of the gas distribution market in Italy, creating a major player in Europe.
Structured financing agreement
The transaction includes bridge financing underwritten by JP Morgan and syndicated to a range of banks, including Banco BPM, BofA Securities, Citi, Morgan Stanley and Société Générale. The financial package is designed to preserve Italgas’ current credit profile, while incorporating a capital increase of one billion euros to refinance this bridging loan.
Italgas expansion strategy
Paolo Gallo, CEO of Italgas, stressed that this acquisition would create a European leader in gas distribution, while strengthening the company’s strategic position in the European energy market. The operation is part of Italgas’ global strategy aimed at optimizing its assets and capturing more synergies by unifying distribution infrastructures in Italy.
2i Rete Gas position and implications
One of the key aspects of this transaction is the buyout of the stakes held by F2i, Italy’s largest infrastructure fund, which controls 64% of 2i Rete Gas. The remaining 36% is held by Dutch pension fund APG and investment group Ardian, via the Finavias vehicle. The valuation of the operation reflects the status of 2i Rete Gas as the second largest gas distributor in the country.
Regulation and market impact
Strategically, the deal comes as the gas distribution sector is subject to strict regulation by the Italian energy authority, which sets gas transportation rates and investment returns. Consequently, the operation could have a significant impact on gas distribution costs and prices for end users depending on the evolution of regulations.
Consequences for the European market
This acquisition aligns with current trends in the European energy market, marked by increased consolidation, particularly in strategic infrastructure. The challenges of this transaction are also linked to Italgas’ ability to secure effective financing, while managing the expectations of European regulators on competition and energy market governance issues.
Ultimately, this transaction could redefine the Italian gas market and position Italgas as a key player in gas distribution at European level, while strengthening its negotiating capabilities in a context of complex energy regulation.
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