- Title: Spain's Gas Natural targets $40 bln EDP merger - sources
- Date: 4th July 2017
- Summary: BARCELONA, SPAIN (FILE) (REUTERS) EXTERIOR OF GAS NATURAL HEADQUARTERS COMPANY SIGN VARIOUS EXTERIORS OF HEADQUARTERS
- Embargoed: 18th July 2017 15:52
- Keywords: Spain's Gas Natural targets $40 bln EDP merger sources
- Location: BARCELONA, SPAIN / SINES, LISBON, PORTUGAL
- City: BARCELONA, SPAIN / SINES, LISBON, PORTUGAL
- Country: Spain
- Topics: Company News Markets,Economic Events
- Reuters ID: LVA0016OAZ7V1
- Aspect Ratio: 16:9
- Story Text:Spanish power and gas company Gas Natural has approached Portuguese rival EDP about merging to form Europe's fourth biggest utility by market value, people familiar with the matter said on Monday (July 3).
Talks over a potential 35 billion euro ($40 billion) deal and its potential structure are still at an early stage and there is no certainty over their outcome, four sources said, although Gas Natural chairman Isidre Faine has already sounded out his Portuguese counterpart Antonio Mexia about a tie-up.
A deal would create an Iberian champion competing with France's Engie and EDF and not far behind heavyweights Enel and Iberdrola.
And it could trigger a long expected wave of consolidation among Europe's biggest utilities as they seek to gain scale and shift their revenue streams towards renewables to protect profits from steep competition and narrower margins.
A Gas Natural-EDP merger is seen as a good strategic fit as EDP has made big headway in renewable power while Gas Natural remains strong in gas-fired or coal generated electricity.
The two have a complementary footprint, especially in Latin America where the Spanish firm is strong in Chile and Mexico and the Portuguese group in Brazil as well as in the United States.
Some local media reports said on Tuesday (July 4) that EDP had denied it was in negotiations with Gas Natural. - Copyright Holder: FILE REUTERS (CAN SELL)
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