May 26 (Bloomberg) -- Eni SpA confirmed exclusive talks to buy Suez SA's 2.5 billion-euro ($3.9 billion) majority stake in Belgian natural gas distributor Distrigaz SA, as Italy's largest oil company seeks clients and access to the fuel.

The companies may sign a final sale agreement by May 29, after Eni completes a review of Distrigaz's accounts, the Rome- based company said in a statement today. Suez, the French power provider merging with Gaz de France SA, announced the accord May 24, saying Eni beat out rivals by offering the highest price.

Eni may benefit from ``the relevant strategic rationale of the deal based on increasing market size,'' UniCredit analysts including Sergio Molisani, who has a ``buy'' rating on the stock, wrote in a research report. A purchase would boost Eni's European gas market share to 27 percent from 19 percent, the report said.

Suez and Gaz de France, both based in Paris, agreed to sell Suez's 57 percent stake in Distrigaz to gain approval for their merger. Brussels-based Distrigaz has contracts for liquefied natural gas and supplies of fuel from the Netherlands, Norway and Qatar.

Eni gained as much as 18 cents, or 0.7 percent, to 26.58 euros and closed little changed at 26.42 euros in Milan, giving it a market value of 105.8 billion euros. Distrigaz shares rose 89.99 euros, or 1.5 percent, to 6,289 euros on May 23 and were suspended from trading in Brussels today, pending a statement. Distrigaz's market value of 4.4 billion euros means Suez's stake is worth 2.5 billion euros.

Swapping Assets

The Eni offer, based on swapping assets, beat out bids from E.ON AG and Electricite de France SA. The purchase would give Eni, already the largest European company in terms of gas volumes sold, more access to fuel and customers in northern Europe.

``Eni's targets for growth in the European gas market are ambitious,'' said Roberto Ranieri, an analyst with a ``buy'' rating on the stock at Banca IMI in Milan. ``It's clear that expansion in the European gas market is a major part of their strategy and this transaction is part of that.''

Eni offered the concession to supply natural gas to the city of Rome and some Italian power generation capacity as part of its bid, Chief Executive Officer Paolo Scaroni said May 20. The company also offered gas supply contracts and access to assets in the North Sea and Gulf of Mexico.

15 Years' Sales

The power and gas supply contracts would include sales for the next 15 years, UniCredit said in the report. Suez's Electrabel SA unit, Belgium's biggest power producer, is a Distrigaz client.

Distrigaz attracted European competitors seeking to increase their size as power and gas markets open to competition. The company owns pipeline capacity for gas transit in Belgium and other European countries, and sells the fuel to industrial consumers across northwestern Europe.

Scaroni, who said in February that winning Distrigaz was ``very important'' for Eni, also said the company would invest to expand the Zeebrugge gas import terminal on Belgium's North Sea coast.

Eni could also gain from access to the hub and to northern European markets, according to the UniCredit report. The bank is unlikely to change its view on Eni, analyst Molisani wrote.

Lazard Freres & Co. and Mediobanca SpA are advising Eni on the transaction.

To contact the reporter on this story: Anthony DiPaola in Rome at adipaola@bloomberg.net.

Last Updated: May 26, 2008 12:56 EDT