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UPDATE 2-Dutch fund DIF and EDF to buy German gas grid Thyssengas -sources

Published 15/06/2016, 11:11 pm
© Reuters.  UPDATE 2-Dutch fund DIF and EDF to buy German gas grid Thyssengas -sources
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* Macquarie to sell Thyssengas to DIF, EDF -sources

* Buyers to pay around 700 million euros -sources (Adds background on buyers)

By Arno Schuetze and Freya Berry

FRANKFURT/LONDON, June 15 (Reuters) - Dutch infrastructure fund DIF and French utility EDF EDF.PA have agreed to buy German gas grid Thyssengas from Macquarie MGX.AX for some 700 million euros ($730 million), two people familiar with the matter said.

Power and gas grids are among the most sought-after infrastructure assets, giving investors stable returns on their investments of up to 9 percent at a time when interest rates in Europe have fallen to zero. and EDF Invest are paying roughly 1.5 times the book value of Thyssengas' regulated asset base, the people said on Wednesday, a premium to other recent grid deals in Germany which could limit their returns on the deal, one of the sources said.

Macquarie declined to comment, while DIF and EDF were not available for comment.

DIF is an infrastructure investor managing about 3.3 billion euros in funds. Its assets span roads, hospitals, solar power and trains with the bulk of its investments being below 50 million euros each. According to its website, DIF has the ability to invest up to 250 million euros in one transaction.

The sources did not disclose the size of the stake that EDF Invest is taking. EDF Invest - which manages the asset portfolio covering the group's long-term nuclear decommissioning commitments - usually takes minority stakes when investing in infrastructure, real estate and private equity.

Thyssengas, which operates a 4,200 km underground pipeline network and employs 270 staff, transports up to 10 billion cubic metres of natural gas per year.

The DIF/EDF consortium beat runner-up Fluxys FLUX.BR from Belgium as well as Italian peer Snam SRG.MI , First State Investments, a Chinese group and a consortium of Luxembourg-based power firm Enovos ENVIL.UL and Swiss Life, which had also handed in final bids.

In other German grid deals, such as RWE's Amprion sale, E.ON's Open Grid Europe divestment or later smaller deals like the EVG Thueringen sale - the buyers usually paid no more than 1-1.2 times the value of the regulated asset base.

The sale of Thyssengas, which Macquarie acquired from German utility RWE RWEG.DE in 2011, is managed by Bank of America Merrill Lynch (NYSE:BAC).

($1 = 0.8910 euros)

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