The Italian gas TSO Snam has decided to demerger and list its distribution subsidiary Italgas from Snam, the State-owned company retaining a 13.5% stake of its former subsidiary.
The spin off will enable Snam to focus on its growth potential in the European market, while Italgas will be a major player in the consolidation of the distribution sector in Italy consecutive to new market rules in the distribution sector. Snam will not record any cash inflow during the initial public offering of its subsidiary, but the transaction will reduce its debt and facilitate the raising of new capital markets to finance its strategy of integration of European networks. The transaction in expected to be completed by the end of 2016.
Snam, controlled by state lender Cassa Depositi e Prestiti (CDP), also announced it plans to invest€4.3bn in transportation and storage in Italy as part of its 2016-2020 strategic plan, while Italgas is expected to invest €2.0bn over the period.