Snam Considers Increasing Stake in Germany's Open Grid Europe
By Alberto Chiumento and Laura Contemori
(Reuters) - Snam will consider increasing its newly acquired stake in Germany's largest independent gas transmission operator Open Grid Europe (OGE), the head of finance of the Italian gas grid operator, Luca Passa, said on Tuesday.
WHY IT MATTERS
Snam bought a 24.99% stake on Monday in Vier Gas Holding, which owns all of OGE, for an equity value of 920 million euros ($1.0 billion).
The deal - expected to close in the third quarter of this year - marks Snam's entry into the German gas market, Europe's largest by volume.
It acquired the stake from Infinity Investments, an investment vehicle company wholly owned by Abu Dhabi's Investment Authority.
KEY QUOTES
"(The acquisition) is a first step. We will also see what the attitude of the other shareholders will be," Passa told analysts on Tuesday.
"We will consider it, but we also want to see how the regulatory framework evolves in Germany," he added in response to a question about a possible stake hike.
BY THE NUMBERS
The 24.99% stake in OGE will increase Snam's net income by around 40 million euros, or 2-3%, annually between 2026 and 2029, Snam said on Tuesday.
Its adjusted earnings per share will increase by around 1% over the same period, the company added.
WHAT'S NEXT?
OGE will help Snam expand its presence in current and future key energy corridors, the Italian company said.
Snam Chief Executive Officer Stefano Venier said the group was looking to expand further in Europe beyond Germany, targeting "the southernmost part of the Mediterranean area and does not plan to expand to other parts of the world."
($1 = 0.9155 euros)
(Additional reporting by Giancarlo Navach; Editing by Emelia Sithole-Matarise)
