UK: Snam, Fluxys Acquire E.ON’s Stake in Interconnector

Snam and Fluxys yesterday reached an agreement to acquire E.ON’s 15.09% stake in Interconnector (UK), owner and operator of the subsea pipeline between the UK (Bacton) and Belgium (Zeebrugge) providing a strategic bi-directional link between the UK and the continental gas trading places.

Last January, Snam and Fluxys entered into a strategic alliance aimed at promoting the integration of the European gas networks and subsequently agreed in February to jointly acquire Eni’s 16.41% stake in Interconnector (UK). As with the acquisition of Eni’s stake, both companies are to contribute 50% each in the acquisition of E.ON’s stake.

Carlo Malacarne, CEO of Snam, said: “Today’s announcement represents a further confirmation of Snam’s commitment to becoming a major integrated player in the European regulated gas business through the development of the North-South corridor and the creation of a Southern European gas hub. The agreement also fosters our partnership with Fluxys and gives a further contribution to enhancing flexibility and security of supply in Europe, in line with the recommendations and provisions of the EU’s third legislative package”.

Walter Peeraer, Managing Director of Fluxys, commented: “This new agreement strengthens our partnership with Snam to enhance security of supply by enabling South to North flows between Italy and the UK. Our venture will connect the gas trading places in the Northwest and the South of Europe and stimulate deeper liquidity across the European gas system. We are also looking forward to sharing our cross-European know-how with Interconnector (UK) to support the company’s development also after its exemption period until 2018.”

The total consideration for the 15.09% stake in Interconnector (UK) amounts to € 127 million. Snam and Fluxys expect to complete the transaction by the end of 2012. Prior to completion, the transaction requires approval from the relevant authorities as well as from the Board of Interconnector (UK).