Lithuania Buys EON Gas Stakes for Edge in Gazprom Talks

Lithuania bought German utility EON SE (EOAN)’s stakes in local natural gas companies to regain a majority in companies also held by Russia’s OAO Gazprom (GAZP) as the government seeks to win a price cut for gas supplies.

Under an agreement signed today, state holding companies will pay 508.6 million litai ($201 million) for EON’s 38.9 percent in utility Lietuvos Dujos AB and its spun-off former transmission unit, Amber Grid AB, and its 11.8 percent of electricity distributor Lesto AB, Prime Minister Algirdas Butkevicius said today in Vilnius, the Lithuanian capital.

The Baltic nation, which split control of its gas companies to meet European Union competition rules, is also seeking to weaken the bargaining power of Gazprom, its only source of gas. For EON, the deal is a continuation of European asset sales that have raised more than 20 billion euros since 2010 to reduce debt and help finance expansion elsewhere.

The agreement “will help resolve remaining problematic issues with other partners, namely Gazprom,” Lithuanian Energy Minister Jaroslav Neverovic said May 16 on LRT radio.

State-owned EPSO-G UAB will own 56.6 percent of Amber Grid after the transaction and by law must make a public offer to buy all remaining shares.

State-owned Lietuvos Energija UAB will own 56.6 percent of Lietuvos Dujos and must offer to buy the rest of its shares. Lietuvos Energija also agreed to buy EON’s stake in power distributor Lesto to complete the German company’s exit from Lithuania.

To contact the reporter on this story: Bryan Bradley in Vilnius at bbradley13@bloomberg.net

To contact the editors responsible for this story: Balazs Penz at bpenz@bloomberg.net James M. Gomez

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.