06-08-01 German utility Energie Baden-Württemberg (EnBW) and Italian energy group ENI are in talks on a joint acquisition of a 25 % stake in Germany's eighth largest gas supplier Gasversorgung Sueddeutschland (GVS). This was confirmed by the finance ministry for the state of Baden-Württemberg, which owns the stake in question. It said another energy group, which it was unwilling to name, has also expressed interest in the shares.
EnBW already holds indirectly a 33 % stake in GVS. People close to the negotiations said talks between EnBW and ENI are already advanced. They said there's already been a declaration of intent to form a 50:50 joint venture for the acquisition of a controlling majority in GVS. There have also been reports of an agreement on the issue of price. Estimates of the value of GVS vary from DM 800 mm to DM 1.2 bn.

GVS would offer a useful route through which ENI's gas subsidiary SNAM could enter the German gas market, which, despite moves towards liberalization, has seen little competition so far. EnBW, which remains primarily an electricity utility and has yet to make any significant moves into the gas market, could start to offer its clients a gas-and-electricity package.
But attempts towards a majority acquisition of GVS could run into an obstacle in the form of Mannheim-based MVV Energie, which holds a stake of 26.5 % stake. Under the existing agreements, any changes to the shareholding structure must be approved by shareholders accounting for 75 % of the capital.
MVV also owns a stake of 15 % in GVS's main supplier, Ruhrgas. MVV management-board member Roland Hartung was surprised to learn of Baden-Wuerttemberg's plans, but he said his company would not allow itself to be pressurized.