Enel signed an agreement to sell its entire business in Romania to Public Power Corp. for EUR 1.26 billion. The Greek utility is also taking over EUR 300 million in debt while minority interests are valued at EUR 350 million.
In its first major expansion abroad, Public Power Corp. (PPC) is acquiring the operations of Italy-based Enel after a lengthy negotiation.
The Greek company, controlled by the government through a minority stake, agreed to pay EUR 1.26 billion, equivalent to an enterprise value of EUR 1.9 billion. Enel explained the transaction includes EUR 300 million in firm value adjustments and EUR 350 million in minority interest, on a rounded basis.
Two thirds of transaction to be covered by loans
PPC revealed it would cover EUR 800 million from a five-year loan of EUR 485 million that it secured from Greek banks and a EUR 315 million from international lenders. The rest would be own funds.
The takeover is expected to close “by the third quarter” pending regulatory approval, the two companies said. Enel announced a month ago that the acquisition should be done by the end of June. The final sum could be bigger due to potential additional payment based on the future value uplift for the supply business.
Chief Executive Officer of PPC Georgios Stassis was the head of Enel Romania from 2016 to 2019. The latest move fits the company’s strategy of pursuing acquisitions and opportunities in Southeastern Europe, particularly in Romania and Bulgaria.
Enel deal brings distribution, supply, renewables, energy services to PPC
Enel is the second-largest company in power distribution in Romania, with its three majority-owned power distribution firms controlling 35% of the market: E-distribuție Muntenia (which includes the Bucharest area), E-distribuție Banat and E-distribuție Dobrogea.
It is the biggest electricity supplier in the country with Enel Energie Muntenia and Enel Energie, in which it holds 78% and 51%, respectively. They have a market share of 16% in total, PPC said. The two subsidiaries supply gas as well.
PPC, also known for its Greek acronym DEI, is the only power distributor in its home market while it holds a 63% stake in the electricity supply sector.
The Italian company’s Romanian subsidiary Enel-X is developing an electric vehicle charging network, as Enel X Way, and offering energy services.
Enel has 5.4 GW in solar and wind projects under development in Romania
The renewable energy business consists of eight wind farms with 499 MW in capacity and four solar power plants of a combined 36 MW. In the pipeline are seven wind parks (2.3 GW) and 11 photovoltaic units (3.1 GW)
“With the sale of all our activities in Romania, we continue to implement the disposal plan that was announced during the presentation of Enel’s 2023-2025 Strategic Plan,” said CEO and General Manager of Enel Group Francesco Starace.