E.ON to Reduce Debt Through Sale of Open Grid

Germany's E.ON has said that it will sell its Open Grid gas pipeline network in a bid to reduce its debt and raise divestments of €15 billion.

The company has agreed to sell the gas grid for €3.2 billion, it said, to a consortium led by Australian banking group Macquarie Group. The other shareholders in the consortium are Infinity Investments, British Columbia Investment Management Corporation, and MEAG MUNICH ERGO Asset Management. The sale was completed yesterday.

The sale comes as part of a drive by E.ON to bring down spiralling debt in recent years and 

"The sale of Open Grid Europe brings E.ON closer to its goal of generating roughly €15 billion through divestments by the end of 2013," the company said in a statement.

"E.ON has already recorded divestment proceeds totaling more than €12 billion. E.ON will use the money to reduce its debt and invest in growth businesses

Open Grid, which was formerly the gas transmission arm of E.ON Ruhrgas, was separated into its own company in 2010 in response to EU competition directives. It controls over 12,000 kilometres of pipeline through Germany and is a major transit point for the imports of Russian gas.

The deal must now be approved by German Federal Cartel Office and the German Federal Ministry of Economics and Technology. E.ON says it expects the deal to be closed by the third quarter of this year.