Gas Natural, engaged in the sale and distribution of natural gas, has received an approval from The Spanish Comision Nacional de la Competencia to acquire electricity and gas utility Union Fenosa.
According to the company, the resolution from the Spanish Comision Nacional de la Competencia’s (CNC) board, which is to be evaluated by the Spanish government’s vice president for economy, Pedro Solbes, authorizes the transaction and for Gas Natural implies the assumption of a series of commitments proposed to the CNC.
Gas Natural’s commitments include the disposal of 600,000 connection points for gas distribution and the portfolio of small customers linked to the network as well as 2,000MW of combined cycle gas turbine (CCGT) based power generation in operation and its stake in Enagas.
Gas Natural will also have to assume a series of commitments in relation with corporate governance in Cepsa and Union Fenosa Gas Comercializadora. The assets that Gas Natural has committed itself to sell have a significant value, are not replicable in the mid-term and their sale will be carried out together with the resources needed by future buyers to carry out an autonomous operation.
Also, these disposals are consistent with the intended structure for the transaction and allow to maintain the business model of gas and power convergence which Gas Natural pursued with the integration of Union Fenosa. Once the decision is made by the Spanish government’s vice president for economy, Gas Natural would have 20 days to submit to the CNC a confidential remedy plan with a detail of the execution of the commitments.
The authorization of the transaction and the assumption of the corresponding commitments allow to maintain the transaction calendar, with its closing expected in April 2009.
