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Consolidation within the Italian utility sector is currently taking place after the merger between listed utility companies ASM Brescia and AEM Milano. Hera, the listed Italian utility, is still evaluating a possible merger with either Iride or Acea, the two listed Italian utilities, while Acea is considering a merger with Hera and possibly Iride, said people familiar with the situation.
A person familiar with Hera said the company is carrying on evaluation on both Acea and Iride and described them as “the best independent utilities left on the market, after the merger between AEM Milano and ASM Brescia”.
Talks with the two potential partners are expected to start after Hera’s shareholders meeting, which will be held in mid-September. “At the meeting, shareholders will discuss the possibility of a merger with either Iride or Acea,” the person stated.
The person said Hera should gain more synergies from a merger with Iride rather than Acea, since a merger with Iride would give an increase of Ebita of 7%, while a merger with Acea would give an increase of 6%.
A person close to Acea said the listed utility for the city of Rome is currently studying different situations, and the merger with Hera is only one of the possibilities under consideration. The person added that Acea is also considering a possible merger with listed northern Italy utility Iride, but declined to give further information on this matter.
A source close to the situation believed that at the end, Hera will choose Acea as its merger partner, and that talks will start in September. The source said there are disagreements among Hera’s shareholders on whether to merge with Acea or not, due to different political views. The person familiar with Hera said, “each shareholder has his own preference,” but added that “this is not only a political matter, it is also an industrial matter.”
An Italian report claimed that Sergio Cofferati, the major of Bologna, is pushing for the merger for political reasons connected to the foundation of the new centre-left Partito Democratico.
Hera is controlled by four major shareholders: the Bologna province (20.5%), the Romagna provinces (21.3%), the Modena province (13.8%) and the Ferrara province (2.8%).
A merger between Hera and Acea would create a group with a market cap of about EUR 5.5bn and would be the number two utility in Italy after AEM/ASM, the person close to Hera said.
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