ČEZ buys majority stake in Czech gas company GasNet for over CZK 21.3 billion

The state-controlled energy group ČEZ has bought a 55.2 percent stake in Czech gas company GasNet, which operates a distribution network in the Czech Republic. It will pay Macquarie Asset Management 846.5 million euros, or more than CZK 21.3 billion. The group expects the acquisition to strengthen its position in the gas market. The ČEZ Group announced the deal today. The transaction still requires approval from the European Commission and the Czech Ministry of Industry and Trade.

ČEZ will pay the agreed purchase price using a bridge loan provided by a syndicate of commercial banks, which it will subsequently refinance through bond issues.

GasNet supplies natural gas to households and businesses throughout the Czech Republic, except in Prague and the South Bohemian Region. It manages 65,000 kilometres of gas pipelines and has more than 2.3 million customers. It therefore holds an approximately 80 percent share of gas distribution in Czechia. Other gas distributors in Czechia are EG.D, part of the E.ON Group, in South Bohemia, and Pražská plynárenská in the capital.

The acquisition of GasNet is part of ČEZ’s strategy to modernise the energy sector. „We are acquiring assets that are important for the Czech heating and energy sectors’ transition to hydrogen, while also benefiting our shareholders by increasing the share of regulated business in our portfolio,” said ČEZ Chairman and CEO Daniel Beneš. He noted that in previous years the group had also acquired capacity at two liquefied natural gas terminals in Germany and the Netherlands.

„The end of coal-fired power and heat production is approaching fast, and natural gas distributed by GasNet will be key to our energy security. GasNet will also play an important role in the future in transporting hydrogen or other green gases. ČEZ also wants to capitalise on its extensive experience operating electricity distribution networks and focus on realising synergies from operating gas and electricity networks, which cover almost the same geographical area,” said ČEZ Vice-Chairman Pavel Cyrani.

GasNet’s net profit fell to CZK 1.89 billion two years ago, down 35 percent year-on-year.

The ČEZ Group is one of the largest energy companies in Czechia. The state is its majority shareholder, holding around 70 percent of the shares through the Ministry of Finance. Last year, the company earned CZK 29.6 billion, with net profit falling by more than 63 percent year-on-year. The main reason was extraordinary taxes and levies, amounting to around CZK 40 billion. The GasNet acquisition was not reflected in last year’s results and is expected to be reflected this year.