By Bart H. Meijer
THE HAGUE (Reuters) -The Dutch government is selling 46% of power grid operator TenneT’s German unit to a consortium of investors for up to 9.5 billion euros ($11.3 billion), it said on Wednesday, kicking off the separation from a business it has been trying to divest for years.
The sale to a consortium of Dutch pension fund manager APG, Norges Bank and Singapore’s sovereign wealth fund GIC comes as funding requirements for power lines soar across the continent, forcing owners of such assets to seek fresh capital elsewhere.
It follows an unsuccessful attempt to sell TenneT Germany to the German government last year.
Under the agreement, the consortium will take a stake of 46% in TenneT Germany via a private placement of new shares by the Dutch government.
With more than 14,000 kilometres (8,699 miles) of power lines, TenneT Germany is the country’s biggest operator of high-voltage transmission grids. TenneT is also the sole grid operator in the Netherlands.
The consortium, with its investment, provides TenneT Germany with 8.5 billion euros it needed to sustain its credit rating and an extra buffer to limit risks for the Dutch state, the Dutch finance ministry said.
APG SET TO TAKE AN 11% STAKE IN TENNET GERMANY
APG said in a statement it would acquire about an 11% stake in TenneT Germany. It was not yet clear how GIC and Norges Bank would split the remaining 35%.
Germany continues to consider a minority stake in TenneT Germany, an economy ministry spokesperson said on Wednesday, after such plans fell apart last year under the previous government.
Dutch Finance Minister Eelco Heinen said he expected more clarity on possible German investments before the end of the year.
Sources told Reuters in May that a sale of new shares in TenneT Germany could raise up to 12 billion euros, either via a private placement or an initial public offering in what could become one of Europe’s biggest deals this year.
In a sign of how big funding needs for grid expansion are, TenneT Germany’s smaller peer Amprion earlier this month secured 3.2 billion euros from Apollo Global Management in a deal with RWE.
Germany, which already holds minority participation in high-voltage power grids TransnetBW and 50Hertz, has in the past expressed interest in buying a 25% stake in TenneT Germany if there is an official sales process.
($1 = 0.8494 euros)
(Reporting by Bart Meijer and Christoph Steitz; Additional reporting by Holger Hansen; Editing by Bernadette Baum)
