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Eni has inked a deal with Snam to sell its 49.9 percent stake (directly and indirectly owned) in certain companies operating two groups of international gas pipelines connecting Algeria to Italy, Trend reports with reference to Snam.
In particular, the perimeter of the transaction includes the onshore gas pipelines running from the Algeria and Tunisia borders to the Tunisia coast (TTPC), and the offshore gas pipelines connecting the Tunisian coast to Italy (TMPC).
Eni will contribute its entire ownership interests in the two pipelines to a newly incorporated Italian company (NewCo) in which Eni will continue to hold a 50.1 percent stake, whereas the remaining 49.9 percent will be sold to Snam for a purchase price equal to 385 million euros.
Snam will fund the payment of the purchase price with its own financial resources.
The transaction will create synergies among the parties’ respective areas of expertise in gas transport on a strategic route for the security of the natural gas supply in Italy, enabling potential development initiatives within the hydrogen value chain from North Africa.
The agreement also provides for an earn-in and earn-out mechanism to be calculated on the basis of the revenues that will be generated by the target companies. The target companies generated a net income (100 percent of Eni’s stake) of around 90 million euros in 2020.
Eni and Snam will exercise joint control over the NewCo, on the basis of equal governance principles and both companies will therefore consolidate NewCo through the equity method.
