The European Commission has cleared the acquisition of Terna Energy by Masdar under the EU Merger Regulation, paving the way for the completion of the €3.2 billion deal. In particular, the Commission concluded that the transaction will not raise competition concerns. Thus, the next step is to obtain the approval of GEK Terna's shareholders at the General Meeting set for October 23. 

 WHAT THE DEAL INTENDS

This is the largest energy transaction to date on the Athens Exchange and one of the largest in the renewable energy sector in the EU. The deal will see Masdar initially acquire 67% of the shares of Terna Energy for a price of €20/share and, in a second year, launch a mandatory cash tender offer to acquire all the remaining shares of the company with the aim of reaching 100%. It is noted that the acquisition price represents a total valuation of €2.4 billion and an enterprise value of €3.2 billion.  However, GEK Terna is not completely closing the door on the energy sector.  There is an option to buy 50% in hydroelectric projects as well as in projects, pumped storage and offshore wind projects with a total capacity of about 3 GW There is a put option for the pumped storage project in Amfilochia, which provides that Masdar has the right to sell to GEK Terna 50% of the share capital of Terna Energy Pump Station Unitary Limited Company (100% subsidiary of Terna Energy).

WHO MASDAR IS

Masdar (Abu Dhabi Future Energy Company) is one of the fastest-growing renewable energy companies in the world that promotes the development and application of solar technologies, wind and geothermal energy, battery storage and green hydrogen. Founded in 2006, it has developed and invested in projects in more than 40 countries with an installed capacity of over 20GW. By 2030, it hopes to become a top producer of green hydrogen and have 100 GW of installed renewable energy capacity. TAQA, ADNOC, and Mubadala jointly own it.

BENEFIT 

GEK Terna's cash and cash equivalents will increase by €864 million, significantly enhancing the group's investment strength, while at the same time removing from the group's consolidated balance sheet loan liabilities related to Terna Energy of €1.1 billion. Speaking about the deal, the group's Chairman and CEO, George Peristeris, stressed that it will lead to additional liquidity of around €900 million. "Thus, the group's total investment capacity now exceeds, in total, €3 billion. These funds will allow us to bid for new major infrastructure projects and concessions in Greece and abroad. In addition, GEK Terna acquires an even more attractive financial profile, as now approximately €1.1 billion is deducted from its total borrowings, resulting in the group's net borrowings (pro-forma) being reduced to zero. In terms of profitability, however, the contribution of Terna Energy is also expected to be offset. Both our net and operating profitability will continue to grow at double-digit rates over the next few years and will exceed €700 million of operating profitability within the next 5 years