With a gas pipeline network of around 900km, Gas Connect Austria is a key supplier of natural gas in Austria and Europe
Gas Connect Austria plays a major role in the supply of natural gas in Austria and Europe. (Credit: Gerd Altmann from Pixabay.)
Austrian electricity provider VERBUND has agreed to acquire a 51% stake in the natural gas transmission company Gas Connect Austria from OMV, an oil and gas company, for €271m ($316.6m).
Under the terms of the agreement, the company will also assume Gas Connect Austria’s outstanding liabilities to OMV on the transaction date. As of 31 December 2019, the liabilities stood at €165.9m.
Gas Connect Austria plays a major role in the supply of natural gas in Austria and Europe. It transports natural gas to the Austrian federal states and also to Germany, France, Slovenia, Croatia, and Hungary.
It operates a gas pipeline network of around 900km long and with a transportation capacity of 143 billion cubic meters annually.
Subject to the amount of liabilities as per closing, VERBUND will pay approximately €436.9m ($510.4m) to OMV.
The acquisition price values Gas Connect Austria at €980m
According to VERBUND, the acquisition cost implies an enterprise value of €980m for Gas Connect Austria.
The acquisition is expected to be concluded in the first half of 2021, upon receipt of regulatory approval and permits.
VERBUND Management Board deputy chairman Michael Strugl said: “VERBUND operates the Austrian power transmission grid and is experienced in operating regulated infrastructure.
“As a bridging technology, gas will continue to play a key role on the path to a renewable energy system. The importance of the gas network will grow significantly in future as it will increasingly be used to transport green gases such as green hydrogen.
“In the long term, we see a global hydrogen economy, one in which large quantities of energy need to be transported internationally. This makes the purchase of Gas Connect Austria a key strategic step for VERBUND.”
The sale is part of OMV’s strategy to exit the regulated gas transport business. It is expected to reduce OMV’s debt by over €570m ($666m).