Fluxys Buys 32% Stake in Medgaz Pipe From Iberdrola, Endesa
Fluxys (FLUX) SA, a Belgian natural-gas pipeline operator, agreed to acquire a 32 percent stake in the Medgaz link from Spain’s Iberdrola SA (IBE) and Endesa SA (ELE), expanding its access to supplies from North Africa.
Fluxys will buy 20 percent from Iberdrola and 12 percent from Endesa for about 233 million euros ($308 million), the Brussels-based company said today in a statement. The deal is dependent on Medgaz shareholders not executing their right to purchase the stake.
Fluxys has a pipeline network stretching more than 4,100 kilometers (2,500 miles), bringing gas to consumers in Belgium as well as transporting fuel across borders to other markets. The Medgaz stake gives it access to a 210-kilometer link running from Algeria to Spain, which can transport 8 billion cubic meters of gas a year.
“The pipeline is a strategically important link for bringing Algerian gas to Europe and it will further gain significance once the interconnection between the Spanish and French markets has become stronger,” Fluxys said. The company expects the transaction to close in the first half of 2013.
Iberdrola, Spain’s largest utility, is selling assets to reduce debt and bolster profit. It has disposed of about 500 million euros of assets this year, it said today, as part of a plan to divest 2 billion euros’ worth by the end of 2014.
The Medgaz deal price includes a 16 million-euro loan to the pipeline venture from Iberdrola, the Bilbao-based company said in a statement.
Fluxys Belgium, a unit of Fluxys, rose 2.6 percent to 32.75 euros as of 3:46 p.m. in Brussels. Iberdrola dropped 2.1 percent to 4.112 euros in Madrid. Endesa fell 1.5 percent to 16.88 euros.
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