ČEZ to bid for Czech gas distribution network GasNet

The partly state-owned energy company ČEZ will bid for the Czech gas distribution network GasNet. ČEZ strategy director and deputy chairman Pavel Cyrani told Reuters that the company is ready to submit a purchase offer. The price could run into tens of billions of crowns. The operator of Czech gas pipelines Net4Gas, which handles gas transit through the Czech Republic as well as domestic transportation, may also be up for sale. The state-owned Czech electricity transmission system operator ČEPS is interested in the company, according to Seznam Zprávy.

GasNet supplies natural gas to households and businesses throughout the Czech Republic, with the exception of Prague and the South Bohemian Region. It operates 65,000 kilometres of gas pipelines and has more than 2.3 million customers. Hospodářské noviny (HN) reported in June that the company has been up for sale since this year. The sale process was launched by its sole owner, a consortium of investors led by Macquarie Asset Management (MAM).

According to Petr Dědeček, director of Patria Corporate Finance, the company could fetch slightly less than ten times its EBITDA, which at GasNet exceeds nine billion crowns.

„GasNet is an asset we are interested in. If the process is formally launched, we would certainly prepare a very strong offer,“ Cyrani said.

He said, however, that the sale process has not yet been formally launched.

GasNet's net profit fell to 1.89 billion crowns last year, down 35 percent year on year. According to HN, the sale process is to be managed from London, where the investor consortium led by Australian company MAM is based. The consortium also includes British Columbia Investment Management Corporation and Allianz Capital Partners. Other gas distributors in the Czech Republic are E.ON Group's EG.D in South Bohemia and Pražská plynárenská distribuce in Prague.

The owner of Net4Gas, which brings gas into the Czech Republic, may also change. The electricity transmission grid operator ČEPS is negotiating to buy the company, according to Seznam Zprávy. Net4Gas operates almost 4,000 kilometres of gas pipelines, as well as compressor and transfer stations. If the acquisition goes ahead, state-owned ČEPS would control the backbone networks for electricity and, newly, for gas. The website reported that the talks are driven by the government's aim to gain control of gas infrastructure.

Net4Gas's profit rose by almost two-thirds year on year to 6.24 billion crowns last year. Revenue increased by a quarter to CZK 12.95 billion. The results improved even though gas transport fell by around 40 percent year on year as a result of Russia's invasion of Ukraine. The owner is Net4Gas Holdings, which is equally owned by a consortium comprising Allianz Infrastructure Luxembourg I S.à r.l. and Borealis Novus Parent B.V. Net4Gas previously operated under the names Tranzitní plynovod, Transgas and RWE Transgas Net. The state was the original owner; following privatisation in 2002, the company was owned by German group RWE.

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