Italgas signs $5.8 bln deal to buy smaller rival 2i Rete Gas (updated)
05/10/2024 19:33
(Adds details, Italgas CEO comment)
By Francesca Landini
MILAN, Oct 5 (Reuters) - Italy's biggest gas distributor
Italgas IG.MI said on Saturday it had agreed to buy smaller
rival 2i Rete Gas in a 5.3 billion euro ($5.8 billion) deal,
including debt.
A merger would mark a major step in the consolidation of
Italy's gas distribution sector and also create a leading player
in Europe, Italgas CEO Paolo Gallo said in a statement.
The equity value of the transaction is 2.06 billion euros,
while 2i Rete Gas' net financial debt and other net liabilities
at the end of 2023 amounted to 3.246 billion euros, Italgas
said.
The gas distributor will cover the cost of the deal via a
bridge financing initially underwritten by JP Morgan and
syndicated to a group of banks including Banco BPM, BofA
Securities, Citi, JP Morgan, Morgan Stanley and Société
Générale.
It will then launch a 1 billion euro rights issue to
refinance the bridge loan with the goal of maintaining its
current credit rating profile.
Italian infrastructure fund F2i has a 64% stake in 2i Rete
Gas. Dutch pension fund APG and buyout group Ardian together
hold the remaining 36.1% under the vehicle Finavias.
Closing of the transaction is expected in the first half of
2025, subject to regulatory approvals.
Gas distribution is a regulated business in Italy with the
country's energy authority responsible for setting fees on the
fuel transport and returns on investments needed to upgrade the
network.
JP Morgan acted as financial adviser for Italgas, Legance
served as legal adviser, and Foglia and Partners was responsible
for tax matters. Rothschild supported Finavias on the deal.
JP Morgan, BofA Securities and Jefferies have provided a
fairness opinion to Italgas' board regarding the deal.
($1 = 0.9111 euros)
(Reporting by Francesca Landini
Editing by Mark Potter)
((francesca.landini@thomsonreuters.com; +39 02 66129437;
Reuters Messaging: reutersitaly.thomsonreuters@reuters.net))