Negotiations on the power grid
Tennet wants a quick sale
March 11, 2024, 5:00 p.m
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16 billion euros in debt, at least 20 billion euros in value and 160 billion euros in investment needs. The Dutch electricity network operator Tennet wants to get rid of its German business and the federal government would take action. However, the negotiations have been dragging on for years.
The Dutch electricity network operator Tennet is accelerating negotiations on the sale of its German business. An agreement this year is very likely, the group said in its annual report. Discussions with the federal government and the state bank KfW will continue, said finance chief Arina Freitag.
Negotiations with the Dutch government about the state-owned company have been going on for years. Last year, insiders estimated the value of Tennet’s German business at up to 25 billion euros. The federal government kept a low profile. “We don’t have a new status,” said a spokesman for the Federal Ministry of Economics in Berlin. There is no agreement. That’s why he doesn’t want to comment on the negotiations.
Several factors would have to be met for a deal, said finance director Freitag. Security of supply in both countries and the stability of the networks must be guaranteed. In addition, as many synergies as possible would have to be leveraged, for example in the expansion of offshore wind turbines. And a fair market price must be achieved. The manager did not want to provide any information about the company’s value. “The higher the better.” She put Tennet Germany’s net debt at 16 billion euros.
Germany and especially the Ministry of Economic Affairs are very interested in an acquisition, as Tennet builds and operates the important north-south electricity highways for the energy transition. The Netherlands wants to sell the German part of Tennet because they are afraid of the necessary investments worth billions, most of which would go to Germany. In its plans for the next ten years, Tennet expects investments of up to 160 billion euros, most of them in Germany.