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Eni Approaches $800 Million Sale of Stake in Renewables Unit to EIP

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Eni Nears Deal to Sell Stake in Plenitude Renewables Unit

Italian oil and gas major Eni SpA is reportedly close to finalizing an agreement with Energy Infrastructure Partners AG (EIP) to sell just under 10% of its Plenitude renewables unit for approximately €750 million ($800 million). The deal is expected to value Plenitude at around €8 billion. While talks are in the final stages, a definitive decision has not yet been reached. Eni had entered into discussions with EIP earlier this year as it sought a partner for the unit ahead of a potential future stock market listing. Plenitude is involved in selling energy to households and businesses, producing renewable power, and operating electric-vehicle charging stations. It serves approximately 10 million retail clients across Europe and operates in 15 countries globally. The sale of a stake in Plenitude would allow Eni to secure the unit's value and provide additional funds for investments, potentially paving the way for an initial public offering in the future. Eni CEO Claudio Descalzi confirmed in September that talks were ongoing with potential suitors for a stake in Plenitude. Both Eni and EIP declined to comment on the matter. Eni had previously postponed the plan to list Plenitude due to the energy crisis in Europe. However, the company still intends to proceed with the listing on the Euronext Milan exchange when market conditions are favorable, likely in 2024. The current valuation of Plenitude is higher than the €6 billion to €7 billion considered in mid-2022. Plenitude, based in Milan, was established to consolidate Eni's energy retailing and renewables businesses. With this potential deal, Eni aims to strengthen its position in the renewable energy sector and capitalize on the growing demand for clean energy solutions.

Implications of Eni's Potential Deal on New Businesses

Eni SpA, a major player in the oil and gas sector, is on the verge of selling a stake in its Plenitude renewables unit to Energy Infrastructure Partners AG (EIP). This move could have significant implications for new businesses in the renewable energy sector. The deal, which values Plenitude at around €8 billion, could set a precedent for valuing renewable energy companies, potentially influencing investment and market interest in this sector.

Impact on Market Dynamics

The sale would also provide Eni with additional funds for investments, possibly paving the way for an initial public offering in the future. This could lead to increased competition in the sector, as more companies may seek to go public to raise funds for expansion.

Future Prospects

Despite postponing the plan to list Plenitude due to the energy crisis in Europe, Eni still intends to proceed when market conditions are favorable. This demonstrates a strong commitment to the renewable energy sector, which could inspire confidence among other players and investors.
Strengthening Position in Renewable Energy
With this potential deal, Eni aims to consolidate its position in the renewable energy sector, capitalizing on the growing demand for clean energy solutions. This could encourage other businesses to invest in renewable energy, fostering innovation and growth in the sector.
Story First Published at: https://financialpost.com/pmn/business-pmn/eni-nears-800-million-sale-of-renewables-unit-stake-to-eip
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