Agreement for the sale by Eni to Snam of 49,9% of the investments held by Eni in the companies active in the TTPC and TMPC gas pipelines for an amount of 385 million euros
San Donato Milanese - November 27, 2021 - Eni and Snam have signed an agreement for the sale by Eni of 49,9% of the investments held (directly and indirectly) by the latter in the companies that manage the two groups of gas pipelines pipelines that connect Algeria to Italy, in particular the onshore gas pipelines that extend from the border between Algeria and Tunisia to the Tunisian coast (the so-called TTPC gas pipeline) and the offshore gas pipelines that connect the Tunisian coast to Italy (the so-called TMPC gas pipeline ) [1].
The transaction provides for the contribution of these investments by Eni in a newly established Italian company (NewCo), of which Eni will continue to hold 50,1%, while the remaining 49,9% [2] will be sold to Snam for an amount of 385 million euros. Snam will finance the payment of the consideration through its own means.
The operation makes it possible to synergistically enhance the respective skills of Eni and Snam on a strategic route for the security of natural gas supplies in Italy, favoring potential development initiatives in the hydrogen value chain from North Africa.
Eni's Chief Executive Officer, Claudio Descalzi, commented: "This operation allows us to free up new resources to be used in our energy transition path, while maintaining with Snam the management of a strategic infrastructure for the security of supplies to the country. . Gas will play a fundamental role in accompanying the transition of energy systems towards zero-emission models, and it is important to maintain the availability and diversification of supply routes for this source ”.
Snam's Chief Executive Officer, Marco Alverà, commented: “This agreement consolidates Snam's central role in the security of supply in Italy and in the transport of energy from the Mediterranean area. Thanks to the operation, Snam projects its infrastructure towards North Africa, which represents a key area for the supply of gas to Italy and, in the future, for the development of hydrogen. In the future, in fact, North Africa may also become a hub for the production of solar energy and green hydrogen ".
The transaction is part of Eni's broader strategy of optimizing the portfolio to accelerate growth in sectors relating to the energy transition. The acquisition allows Snam to position itself on a strategic route for the security of natural gas supplies in Italy and for the development prospects of the hydrogen value chain, also thanks to the natural resources of 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 profit (2020% Eni's share) of approximately 100 million euros in 90.
Eni and Snam will exercise joint control over the NewCo on the basis of equal governance principles and, therefore, both will be consolidated using the equity method.
The execution of the transaction is subject to certain conditions precedent, including obtaining the necessary authorizations in relation to the transaction pursuant to antitrust legislation and the so-called golden power legislation, the examination of the transaction by the additional competent regulatory authorities, as well as the obtaining of the authorization from the Tunisian state and the consents and / or approvals from the shareholders and the boards of directors of some of the companies target. As a result of the deferral of the closing due to the fulfillment of the conditions precedent, a ticking fee will accrue on the agreed payment from the date of the reference balance sheet (30 June 2021) which will be paid by Snam to Eni at the closing of the transaction.
Subject to the fulfillment (or, depending on the case, their waiver) of the conditions precedent set out in the contract, it is expected that the transaction can be completed by the third quarter of 2022.
Transaction with related party
The transaction is carried out between related parties pursuant to article 3 of the regulation adopted by Consob with resolution no. 17221 of March 12, 2010, as subsequently amended and supplemented (the "Consob RPT Regulation") and (i) of Annex 3 of the "Guideline for transactions with the interests of directors and statutory auditors and transactions with related parties", adopted by the Board of Directors of Snam on 30 November 2010 and most recently amended on 15 July 2021 (the "Snam Guideline"), as well as (ii) of Annex C of the Eni procedure "Transactions with interests of directors and statutory auditors and transactions with related parties" ("The Eni Procedure"), adopted by Eni's Board of Directors on May 27, 2021, as Cassa Depositi e Prestiti SpA ("CDP") holds: (i) directly a stake representing 25,96% of the share capital and Eni's voting rights; (ii) indirectly (through CDP Reti SpA, in which it holds 59,1% of the share capital) an equity investment representing 31,35% of the share capital and voting rights of Snam.
The transaction takes the form of a "minor" transaction between related parties for Eni pursuant to Article 7 of the Consob RPT Regulation and Article 5 of the Eni Procedure. In particular, Eni's Board of Directors approved the transaction, subject to the issue of a reasoned favorable opinion by Eni's Risk Control Committee on Eni's interest in completing the transaction, as well as on the convenience and substantial correctness of the related conditions. .
The transaction is configured as a transaction of "greater significance" between related parties for Snam pursuant to Article 8, paragraph 1, of the Consob RPT Regulation and Article 4 of the Guidelines, as the significance index relating to the of the transaction referred to in Annex 3 to the Consob RPT Regulation and Annex 1 of the Snam Guidelines are higher than 2,5%.
Therefore, Snam has activated the safeguards and measures envisaged by article 8 of the Consob RPT Regulation and by article 4.2 of the Snam Guidelines relating to transactions with related parties of "greater importance". In particular, Snam's Board of Directors approved the transaction, subject to the issue of a reasoned favorable opinion by the Snam Control, Risk and Related Party Transactions Committee on Snam's interest in completing the transaction, as well as on the convenience and substantial correctness of the relative conditions.
Snam will publish, within the terms set out in the Consob RPT Regulation and the Snam Guidelines, the information document concerning the transaction relating to transactions of greater significance with related parties, prepared pursuant to article 5 and in compliance with the scheme referred to in Annex 4 of the Consob RPT Regulation, as well as pursuant to Article 4 of the Snam Guidelines.