MILAN (Reuters) – Enel is in late-stage talks to buy a set of assets from Italian renewable energy group ERG that could be worth around one billion euros ($1.2 billion), two sources said on Monday.
“The talks could be wrapped up in coming days,” one of the sources said, cautioning a series of issues still needed to be ironed out.
ERG, one of Europe’s leading wind power players, is selling hydroelectric assets along with some gas-fired power plants to speed up the process to create a pure wind and solar player.
Last Thursday Enel CEO Francesco Starace declined to comment when asked about the utility’s interest in the assets during a conference call on earnings results.
Enel, Italy’s dominant hydroelectric player with almost 12.5 gigawatts of capacity, could bring some of its own renewable assets to the table to clinch the deal, the second source said.
But the source added the option was still open-ended.
ERG and Enel declined to comment.
ERG operates 527 megawatts of hydroelectric plants in Italy that generate core earnings of 87 million euros and has 480 MW of gas-fired capacity.
In May it pledged to spend 2.1 billion euros over the next five years to help add 1.5 GW of renewable capacity in Italy and abroad.
France is ERG’s biggest foreign market but the group is looking to expand in other countries like Spain and Sweden.
Enel, which controls Spanish utility Endesa, has a sizable renewable energy portfolio in Spain.
Sources told Reuters in March that Mediobanca and Rothschild were advising ERG in a sale that had drawn interest from utilities like A2A, Iren, Ascopiave and Engie as well as infrastructure investors.
Last week Italian daily MF said Enel was in exclusive talks to buy the assets in tandem with investment group Infracapital.
($1 = 0.8467 euros)
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