Enel subsidiary e-distribuzione has finalised an agreement with A2A for the sale of a stake in its electricity distribution operations in Lombardy, Italy, for €1.22bn ($1.3bn).

The deal involves the creation of a new entity to which e-distribuzione will contribute its electricity distribution assets in Lombardy, Milan and Brescia.  

A2A will acquire 90% of the stake in the new company, based on a whole company enterprise value of €1.35bn.

The transaction has a customary price adjustment mechanism and is anticipated to be completed by the end of 2024.

e-distribuzione will retain a 10% stake in the new company and will enter a shareholders’ agreement with A2A that includes call and put options for the remaining shares.

A2A CEO Renato Mazzoncini stated: “We have taken a very important step for the group’s growth in the management of strategic infrastructure to support the electrification process of consumption.

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“With this transaction, we are acquiring significant assets, confirming our objective of accelerating investments in electricity networks, promoting the decarbonisation of the country and creating value for communities, in line with our business plan.”

For A2A, the acquisition will generate territorial synergies and can help in speeding up investments necessary for the energy transition, particularly in the electrical distribution sector.

The assets involved in the deal include 800,000 PODs, more than 17,000km of electricity cables and a significant number of substations.

The acquisition will boost the company’s electrical PODs by 70%, facilitating industrial synergies in the region.

The agreement also enables A2A to enhance its investment in the electricity distribution network to €1.4bn by 2035.

These investments will support the energy transition and align with A2A’s strategic plan and decarbonisation goals.

The deal aligns with Enel’s 2024–26 strategic plan, which envisages investing €12.2bn in the Italian grid to benefit 31 million end users served by e-distribuzione.

In March 2024, Enel divested a 49% stake in its energy storage division, Enel Libra Flexsys, to Sosteneo for €1.1bn, furthering its strategic portfolio optimisation.