Portugal's REN to Buy Distributor

Portugal's national gas and power transmission system operator REN a week ago said it will buy EDP Gas for €532.4mn from Portuguese utility EDP.

EDP Gas operates a 4,460km gas distribution network in northern Portugal's coastal area. It is the second largest natural gas distributor in Portugal. The acquisition will be partly funded by a capital increase in REN of up to €250mn to be carried through a public offering, it said April 7.

Two months ago REN acquired a 42.5% stake of Chilean gas grid Electrogas, signalling its diversification into overseas assets. Last week it reassured the public by saying its acquisition of EDP Gas maintains REN's "strong commitment to its operations in Portugal." Shares in REN though have been 5% lower this week, as investors believed the deal was over-priced.

Last year two Japanese investors Marubeni and Toho Gas were cleared to acquire a 22.5% stake in Portugal's other gas distributor, Galp Gas Natural Distribuicao.

National energy grids operator REN, which also owns Portugal's LNG import terminal at Sines, has for several years been 25%-owned by State Grid of China; EDP also has a 5% stake in REN.

EDP's focus lately has turned to supply, rather than networks; it increased its stake in Spanish gas marketer Naturgas from 95% to 100% last year. EDP's largest shareholder with 21.35% is Chinese state generator Three Gorges. 

Mark Smedley