Fluxys (FLUX) G SA, the majority owner of Belgium’s natural-gas grid operator, agreed to buy Eni SpA (ENI)’s minority stakes in German and Swiss pipelines for about $1.15 billion, gaining a 500-mile link to Italy.
Fluxys G will pay 60 million euros ($81 million) for a 49 percent stake in the TENP pipeline linking Belgium and the Netherlands with Switzerland and 974.7 million Swiss francs ($1.07 billion) for 46 percent of the Transitgas pipeline running through Switzerland, Fluxys G and Rome-based Eni said today in separate statements. Brussels-based Fluxys G will raise 300 million euros from a share sale to help finance the transaction, allowing Caisse de Depot et Placement du Quebec to expand its holding to 20 percent.
Eni joins utilities including RWE AG, EON AG and Vattenfall AB in selling transmission assets to reduce debt and satisfy European Union regulators who want to split energy production and transportation due to concern about unfair competition. Caisse de Depot et Placement du Quebec, Canada’s biggest pension-fund manager, acquired 10 percent of Fluxys G in March, lured by the stable returns that guaranteed rates for network operators offer.
“The disposal process is part of the commitments made to the European Commission in September 2010 and is therefore subject to its approval,” Eni said in the statement. Both companies said they expect to complete the transaction before the end of this year.
Fluxys G, which is controlled by a Belgian municipal holding company and also owns 90 percent of the Zeebrugge gas trading hub, said it obtained a 1.04 billion Swiss-franc loan for 10 years from a group of seven lenders. Most of those funds will be used to refinance Transitgas’s existing debt and fund its planned investments for the next five years, with the remainder being used to help pay for the takeover.
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