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Eni S.p.A E, an Italian multi-energy company, has announced that it is exploring the sale of a 20% stake in its renewable and retail business Plenitude. The company has engaged in exclusive discussions with Ares Alternative Credit Management, a leading global alternative investment manager. The deal is part of Eni’s “satellite” strategy, which focuses on creating specialized business units in the low-carbon energy space or upstream projects. These units are structured to attract investments from external financial partners.
E’s Sale of a 20% Stake in Plenitude
The sale of a 20% stake in Plenitude demonstrates Eni’s efforts to develop greener, low-carbon businesses. The company is in discussions with Ares to move forward with the deal. Notably, the negotiations related to the transaction are based on Plenitude’s equity value, which is estimated to lie between 9.8 billion and 10.2 billion euros. Eni has also stated that the value may increase further to over 12 billion euros, considering debt.
Exclusive Talks With Ares Highlight Market Interest
Eni believes that by selling small stakes in its business units, it can support capital expenditures related to low-carbon business while also maintaining its capacity to invest in upstream projects. The Italian energy firm stated that the agreement followed a rigorous and careful selection procedure, which involved several international players who expressed their interest in the company.
Eni’s exclusive discussions with Ares also underpins the interest shown by the alternative investment manager in the company. This demonstrates the attractiveness of the business model and its future growth prospects.
Under its satellite strategy, Eni has executed the sale of a stake in Plenitude, bought by Energy Infrastructure Partners (“EIP”). EIP had previously acquired a 10% stake in Plenitude via two transactions. Additionally, Eni sold a 30% interest in its biofuel unit Enilive to KKR, a U.K.-based investment firm. The company is also in talks with Malaysia’s state-owned energy firm, Petronas, to create a joint venture (JV) that will manage its oil and gas assets in Indonesia and Malaysia.
E’s Zacks Rank and Key Picks
E currently carries a Zacks Rank #5 (Strong Sell).
Some better-ranked stocks from the energy sector are Diversified Energy Company plc DEC, Expand Energy Corporation EXE and RPC, Inc. RES, each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.