Italian utility Enel SpA is planning to buy back its renewable energy unit Enel Green Power for US$3.3 billion.
Enel spun off Enel Green Power in 2010 through an initial public offering. By merging with Enel Green Power, the Italian utility is hoping to enjoy efficiencies from the cash-generating unit.
Enel currently owns 69% of the renewable energy company. It plans to issue as much as 771 million new shares to at a ratio of 0.486 to buy back the stock of Enel Green Power’s minority holders.
“Bringing the (green) business under 100 percent ownership of the group will allow us to accelerate both EGP’s growth and that of the other business lines,” said Enel CEO Francesco Starace said
“Increased investment firepower, greater flexibility in capitalizing on market opportunities are just some of the many benefits to this transaction,” said Francesco Venturini, chief executive officer of Enel Green Power.