German electric utility company EnBW Energie Baden-Württemberg has agreed to divest a minority stake of 24.95% in its transmission grid operating subsidiary TransnetBW to Südwest Konsortium.

The financial details of the transaction were not revealed by the parties.

Südwest Konsortium is a consortium led by SV SparkassenVersicherung and includes over 30 banks, insurance companies, and corporations from the German state of Baden-Württemberg.

As a transmission system operator (TSO), TransnetBW is responsible for supplying electricity to nearly 11 million people in Baden-Württemberg. TransnetBW’s grid serves an area spread over 34,600km².

SV SparkassenVersicherung CEO Andreas Jahn said: “All members of our investor group regard themselves as long-term financial partners of TransnetBW who aim through their investment to make a significant contribution to the improvement of Germany’s energy infrastructure and the success of the energy transition.

“As a sustainability-focused investment, the acquisition of the stake in TransnetBW is a perfect fit with the investment strategy of Südwest Konsortium’s member institutions.”

According to EnBW, the divestiture of the stake in the TSO is being carried out in a multi-stage bidding procedure with precisely defined criteria in compliance with state aid law.

In February 2022, EnBW announced plans to seek a long-term investment partner for a minority stake of a maximum of 49.9% in TransnetBW.

With the signing of the deal with Südwest Konsortium, the electric utility said that it has finalised a major part of the partial sale process.

Besides, EnBW stated that the German state-owned development bank KfW has the option to acquire a second minority stake of 24.95% in TransnetBW.

The option is expected to be exercised in the coming weeks on the market terms determined in the sale process.

Following the completion of the transactions, EnBW will remain the majority shareholder of its transmission grid operating subsidiary.

EnBW CFO Thomas Kusterer said: “We are delighted to have found in Südwest Konsortium a reliable partner for TransnetBW with a long-term focus whose offer fully meets all of our predefined criteria.

“At the same time, this provides EnBW with additional funds for growth investments to accelerate the implementation of the energy transition and to further expand our overall portfolio.”

Subject to the approval of the antitrust authorities, the deal is anticipated to be completed in Q3 2023.