The Italian Competition Authority has authorized the acquisition of 2i Rete Gas S.p.A. by Italgas S.p.A., subject to conditions aimed at preserving market competition.
The transaction, which involves Italy’s two largest natural gas distributors, raised concerns regarding future competitive dynamics in tenders for gas distribution concessions across 65 Italian minimum territorial areas (ATEMs).
Following an extensive investigation involving multiple industry players and associations, the Authority approved the acquisition with stringent divestiture and behavioral measures to mitigate potential anti-competitive effects.
Regulatory Conditions and Divestiture Measures
To ensure a fair competitive environment, Italgas is required to divest at least 20% of the gas redelivery points it manages in 31 ATEMs based on existing concessions. Additionally, in four other ATEMs, the company must sell a share equivalent to the portion acquired from 2i Rete Gas. These transfers will be conducted under the supervision of a monitoring trustee approved by the Authority, following specific procedures and timelines established in the final decision.
Furthermore, across all 65 ATEMs under review, Italgas must implement a range of behavioral remedies, including financial, contractual, technical, and informational measures. These measures aim to encourage competitive tender participation and ensure that other market players can effectively compete against Italgas in future gas distribution concession tenders.
Strategic Significance and Industry Impact
On October 5, 2024, Italgas announced that F2i SGR S.p.A. and Finavias S.à r.l. had accepted its binding offer for the acquisition, culminating in the signing of the Share Purchase Agreement (SPA). The agreement follows negotiations initially disclosed in May 2024.
Paolo Gallo, CEO of Italgas, hailed the acquisition as a historic milestone, reinforcing the company’s position as the leading gas distribution operator in Europe. “With this transaction, Italgas Group marks a significant achievement in its long and prestigious history. The acquisition of 2i Rete Gas allows us to become Europe’s largest operator in the gas distribution sector, further strengthening our role in innovation and digitalization,” he stated.
Italgas’ expansion strategy aligns with European decarbonization goals by leveraging advanced digital technologies, including artificial intelligence, to enhance real-time infrastructure management, operational efficiency, and safety. The integration of 2i Rete Gas will enable the company to optimize its distribution network while maintaining sustainable energy costs for consumers.
Financial and Transactional Details
2i Rete Gas, Italy’s second-largest gas distributor, serves 4.9 million customers nationwide. In 2023, it reported adjusted revenues of €815.0 million, an adjusted EBITDA of €546.3 million, and an adjusted net profit of €181.3 million.
The total equity value of the transaction amounts to €2.06 billion, while the net financial debt and other liabilities as of December 31, 2023, stand at €3.246 billion. The closing of the acquisition is expected in the first half of 2025, subject to obtaining the necessary regulatory approvals.
To finance the transaction, Italgas has secured a bridge loan underwritten by J.P. Morgan, which will be syndicated to a consortium of banks including Banco BPM, BofA Securities, Citi, Morgan Stanley, and Société Générale. Additionally, the company plans to conduct a €1 billion rights issue to maintain its credit rating profile, with further details on the capital increase to be announced in due course.
The acquisition of 2i Rete Gas represents a pivotal moment for Italgas as it consolidates its leadership in the European gas distribution market while adhering to regulatory requirements to ensure continued competition within the sector.
