PPC close to acquiring Enel Romania
Public Power Corporation is entering exclusive negotiations with Enel for the acquisition of the activities of the Italian company’s subsidiary in Romania.
The Greek utility announced on Wednesday it has signed an exclusivity agreement with Enel for the possible acquisition of all Enel Group holdings in Romania. The final decision to submit a binding offer to Enel will be taken upon completion of exclusive negotiations at the end of January 2023, during which the two parties will negotiate the transaction documents and PPC will conduct due diligence.
PPC has been scanning the Romanian market along with that of Bulgaria for months. Although the initial investigation concerned renewable energy projects, in recent months there have been strong rumors about the acquisition of a vertically integrated company, namely Enel Romania. Enel’s subsidiary in the Balkan country is said to be still being contended for by Canadian fund Brookfield, which manages more than $750 billion in assets and has a presence almost all over the world, and Amber Infrastructure from the UK, which manages more than 10 billion euros and is mainly positioned in infrastructure.
In this battle, PPC has a strategic advantage: its Chairman and Chief Executive George Stassis, who before taking the helm of PPC had been the managing director of Enel Romania.
Enel entered the Romanian market 17 years ago and through its 100% subsidiary Green Power Romania has developed fully vertically integrated activity in production, distribution networks and supply. It has 534-megawatt wind and photovoltaic parks in operation and another 170 MW under construction. It controls three of the eight distribution companies operating in Romania, with a 51% stake in two and 78% in the third, with minority stakes controlled by the Romanian state. In the supply sector, it controls 100% of two companies with leading market shares. In electricity trading, it holds about a third of the local market. Last year it sold 9.1 terawatts of electricity to its customers, while generating 1.3 TW.
However, soaring wholesale electricity prices combined with regulatory measures taken by the Romanian government to protect consumers have left the company with huge working capital needs.
