Edison and Snam Sign $608 Million Gas Storage Deal
(Reuters) — EDF's Italian unit Edison will sell its gas storage unit to gas grid operator Snam in a deal giving the assets an enterprise value of around 560 million euros ($608.05 million), the two companies said on Thursday.
The deal will also include price adjustments that could enable Edison to cash in up to 630 million euros, depending on future developments including the outcome of an arbitration on one of the assets, Edison said in its statement.
Edison last year decided to sound out market appetite for three gas storage sites in Italy - all owned through unit Edison Stoccaggio - drawing interest from several Italian and foreign investors.
"The operation allows Edison to pursue its strategic plan to 2030, which focuses on the development of renewables, on maintaining Italy’s security of gas supply also through the development of green gas...," Edison Chief Executive Nicola Monti said in the statement.
Snam, which is controlled by the Italian government, already operates the bulk of the country's gas storage system including strategic reserves and hopes to get synergies out of the integration of Edison's sites.
Exclusive negotiations started in February and once the deal is finalized, Snam will reach a total capacity of about 18 billion cubic meters (Bcm), including 4.5 Bcm of strategic reserves, Snam said in a separate release.
"This transaction will strengthen Snam's industrial set-up in the sector by integrating the assets within our management model, to the benefit of the country's system's energy resilience," said Snam CEO Stefano Venier.
Large gas storage facilities allow a country to build a buffer to face potential consumption peaks during the winter.
Snam was advised by Rothschild, SocGen on the deal, while Lazard supported Edison on the transaction.
($1 = 0.9210 euros)
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