Snam Acquires 24.99% Stake in Open Grid Europe for €920 Million
Deal News | Apr 08, 2025 | Finance Community IT - 1 Corporate M&A
Snam, assisted by J.P. Morgan, has entered into an agreement to acquire a 24.99% stake in Vier Gas Holding (VGH) from Infinity Investments, an investment vehicle wholly owned by the Abu Dhabi Investment Authority. The deal is valued at €920 million. VGH, headquartered in Luxembourg, indirectly owns Open Grid Europe (OGE), one of the leading independent gas transmission operators in Germany. The transaction completion is anticipated by the third quarter of 2025, subject to regulatory approvals, including antitrust clearance from German authorities and foreign investment approval from the German Ministry for Economic Affairs and Climate Action. OGE operates an extensive gas network that is vital for the European market and plays a significant role in Germany's energy transition, particularly in developing its hydrogen infrastructure. Additionally, Snam has signed an agreement with Belgian gas operator Fluxys to sell approximately 0.5% of VGH's capital, aiming for equal stakes in VGH upon transaction completion. Once finalized, this acquisition will significantly enhance Snam's presence in European energy infrastructure and supports its strategic initiative to develop a pan-European multi-molecule network. The deal's financing might leverage Snam's financial flexibility or hybrid financing, which is expected to increase net income by 2%-3% during the strategic plan period without affecting credit rating or dividend policy.
Sectors
- Energy Infrastructure
- Investment and M&A
Geography
- Germany – OGE, the focus of the acquisition, operates a large gas transmission network in Germany, impacting the country's energy transition strategy.
- Italy – Snam is an Italian company, highlighting Italy's growing influence in the European energy sector with this acquisition.
- Luxembourg – Vier Gas Holding, the company being acquired, is based in Luxembourg, which is relevant to the legal and financial framework of the deal.
- United Arab Emirates – Infinity Investments, the seller in this transaction, is a vehicle of the Abu Dhabi Investment Authority, based in the UAE, signifying cross-border investment activities.
Industry
- Energy Infrastructure – The article discusses Snam's acquisition of a significant stake in VGH, which controls OGE, a major German gas transmission operator, underscoring its involvement in energy infrastructure.
- Investment and M&A – Snam's acquisition of a significant equity stake in VGH is a major M&A transaction, crucial for reshaping the energy infrastructure landscape in Europe.
Financials
- 920 million euros – Equity value of the acquisition deal between Snam and Infinity Investments for 24.99% of Vier Gas Holding.
- 0.63 billion euros – Estimated EBITDA for Vier Gas Transport, directly controlling OGE, as of December 31, 2024.
- 3.39 billion euros – Net debt of Vier Gas Transport as of December 31, 2024.
- 12x – Implied EBITDA multiple for the transaction as estimated for 2025.
Participants
| Name | Role | Type | Description |
|---|---|---|---|
| Snam | Bidding Company | Company | An Italian energy infrastructure company acquiring a stake in Vier Gas Holding. |
| Infinity Investments | Selling Company | Company | Investment vehicle wholly owned by the Abu Dhabi Investment Authority, selling its stake in VGH. |
| Open Grid Europe (OGE) | Target Company | Company | A major independent gas transmission operator in Germany. |
| Vier Gas Holding (VGH) | Target Company | Company | A Luxembourg-based company indirectly owning OGE, the focus of the acquisition. |
| J.P. Morgan | Financial Advisor | Company | Advising Snam on the acquisition strategy. |
| White & Case | Legal Advisor | Company | Providing legal advice to Snam for the transaction. |
| Fluxys | Strategy Partner | Company | Belgian gas transmission operator and partner of Snam in other projects, planning to balance stakes in VGH. |