Allianz, Borealis buy Czech gas grid

The institutional investors paid an enterprise value of €1.6bn to seller RWE.

A consortium of Germany’s Allianz Capital Partners and Canada’s Borealis Infrastructure paid close to €1.6 billion late last week to acquire the Czech gas transmission business of German utility RWE.

“With the sale to Allianz and Borealis Infrastructure we have succeeded to find a very reliable long term investor,” commented Peter Terium, chief executive of RWE.

Allianz and Borealis will each own 50 percent of the gas unit.

The acquisition price breaks down into roughly €1.2 billion of equity and circa €400 million of debt and amounts to nine times the gas business’ earnings before interest, tax, depreciation and amortisation, RWE said in a statement.

Net4Gas, as the gas business is known, operates over 3,600 kilometres of pipelines across the Czech Republic. The pipelines play an important role in transporting gas from Russia into Europe, via the Ukraine. They carry approximately 35 billion cubic meters of gas per year.

The transaction is set to close in the second half of the year.

With close to $10 billion of equity under management, Borealis Infrastructure is the infrastructure investment arm of the $59 billion Ontario Municipal Employees Retirement System. Allianz Capital Partners is the alternative asset management platform of insurer Allianz Group. It manages some €8.5 billion and invests in infrastructure and renewables, among others.