Gas Natural Fenosa (GNF) has entered into agreement with Allianz Capital Partners and Canada Pension Plan Investment Board (CPPIB) to sell 20% stake in its natural gas distribution business (GNDB) in Spain for €1.5bn ($1.7bn).
While Allianz Capital Partners will invest €600m for the stake, CPPIB will spend €900m.
With over 5.3 million connection points and serving some 1,100 municipalities, GNDB is considered as the largest gas distribution network in Spain that manages about 53,000km distribution network.
Its gas distribution activities include regulated services such as inspections, gas meter rentals, and other services.
Besides, the company operates a 1,255 km gas transmission network and 2,249 km of liquefied petroleum gas (LPG) network.
GNF chief executive Rafael Villaseca Marco said: "GNDB is a premium asset in the gas sector in Spain and essential part of our investment strategy.
“We welcome the opportunity to partner with these two well renowned long-term infrastructure investors and continue to invest in further expanding the gas network in Spain and maintaining high efficiency of operations and quality of customer service."
The transaction, which is subject to certain regulatory approvals, is expected to be completed by January 2018.
After the completion of the acquisition, GNF will continue to hold an 80% stake in GNDB.
With a total installed capacity of 15.5GW, GNF currently has operations in more than 30 countries, offering services to almost 22 million customers.
Allianz Capital Partners chief investment officer Christian Fingerle said: "GNDB represents an attractive opportunity for our customers and is fully aligned with our investment strategy of investing in core infrastructure assets.
“We are very pleased to be entering into a new partnership with GNF as a leading international energy group and look forward to further strengthening our relationship with GNF and CPPIB and to support the continued success of this high quality business.”
Image: Regasification plant with LNG carrier. Photo courtesy of © Gas Natural Fenosa.