E.ON To Pick Buyer For Gas Grid By Mid-May - Sources
May 04 2012 - 11:11AM
Dow Jones News
German utility E.ON AG (EOAN.XE) will pick a buyer for its gas
distribution network Open Grid Europe in mid-May after four
consortia submit binding bids by next Wednesday in a deal valued at
up to around EUR3 billion, several people familiar with the matter
told Dow Jones Newswires.
One source said the executive board would pick a buyer May 15,
but that the deal would need the okay by the supervisory board
thereafter. Another source said that E.ON has finished negotiations
with the suitors and that some of the bidders still need some time
to get green light from their investment committees.
An E.On spokesman declined comment.
The bidders include a consortium of French utility GdF Suez
(GSZ.FR), French insurer CNP Assurances (CNP.FR) and IFM Australian
Infrastructure as well as a team around Belgium's Fluxys SA
(FLUX.BT) and General Infrastructure Partners. Another consortium
is made up of Macquarie's infrastructure funds, the Abu Dhabi
Investment Authority and British Columbian Investment Management
Corporation.
One of the consortia includes state-owned Dutch utility Gasunie,
which is teaming up with Allianz SE's (ALV.XE) investment arm
Allianz Capital Partners and the pension fund Canada Pension Plan.
While some sources have suggested Gasunie's status could be in
doubt following the turnover of the Dutch government, one of the
people said Gasunie is still in and that financing is in place.
A spokesman for the Dutch ministry of Economic Affairs declined
to comment.
The planned sale of Open Grid Europe is part of a broader
disposal program under which E.ON plans to sell EUR15 billion worth
in assets by the end of 2013. E.ON has said it plans to use the
proceeds from the disposals to reduce debt and for reinvestment in
emerging markets in a move to reduce dependence on European
countries. So far, E.On assets worth over EUR9 billion have been
sold.
The assets have commanded strong interest because they include
Germany's largest gas distribution network with 12,000 kilometers
of pipelines and serve as a link between Eastern and Western
Europe. German rival RWE AG (RWE.XE) last year sold its
4,100-kilometer pipeline network for around EUR500 million.
-By Jan Hromadko, Eyk Henning and Jessica Hodgson, Dow Jones
Newswires,
(Patrick Buis contributed to this article)
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