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Elia may team up with IFM for Vattenfall bid

Belgian transmission operator Elia is in talks with Australia’s Industry Funds Management regarding a joint bid for Vattenfall’s German grid. The consortium is reportedly considering bidding around €800m for the asset. Vattenfall reopened the auction for its grid in November after exclusive talks with a Goldman Sachs/Allianz/RREEF consortium broke down over price.

Belgian power grid operator Elia is in talks with Australia’s Industry Funds Management (IFM) about teaming up to buy a controlling stake in Vattenfall Europe’s German electricity network, two sources familiar with the process indicated. 

One of the sources suggested that Elia is only in talks with IFM for Vattenfall, contradicting Beligum newspaper De Standaard, which said the Belgium grid operator had a plan B involving private equity fund DG Infra+, sponsored by Dexia and Gimv.A spokeswoman for Elia declined to comment on the partnership.

The newspaper also said the consortium could place a bid of some €800 million for Vattenfall’s German grid – €450 million to cover the equity value and €350 million for the debt portion. It also added that IFM would take a minority stake in the grid.

Elia announced earlier this year that it had entered into discussions with Vattenfall for its maiden investment outside Belgium. Should it buy Vattenfall’s network it would add some 9,700 kilometres of transmission networks across eastern Germany to its portfolio.

Vattenfall reopened the bidding process for its German grid last November, after exclusive talks with a Goldman Sachs/Allianz/RREEFF consortium broke down. The operator said talks had failed because of several key issues, one of them being the purchase price. The consortium was said to have put in a bid of about €500 million.