Snam (SRG) M&A Announcement summary

Deal rationale and strategic fit

• Acquisition of a 24.99% stake in Viergas Holdings (owner of OGE) aligns with a pan-European multi-molecule infrastructure strategy and marks the first major entry into Germany, Europe's largest gas market and a future hydrogen hub.

• Strengthens positioning in key gas and hydrogen corridors, enhances influence on the European energy transition, and supports decarbonization goals.

• OGE's network complements existing assets, reinforcing the south-north energy corridor and supporting integrated market development.

• OGE is a cornerstone of Germany's Hydrogen Core Grid, critical for future hydrogen and CO2 transport corridors.

• Move supports a focus on Europe and the Mediterranean, with divestment from non-European assets.

Financial terms and conditions

• Equity value for the 24.99% stake is EUR 920 million, implying a 12x 2025E EBITDA multiple and 1.29x 2025E RAB.

• Snam will sell 0.5% to Fluxys post-closing, resulting in equal shareholdings (24.5% each) and balanced governance.

• The transaction is expected to be financed through existing flexibility or hybrid instruments, with no impact on credit ratings or dividend policy.

• Expected average net income contribution of EUR 40 million per year (2025-2029), with 2%-3% accretion to net income and 1% EPS accretion.

• VGT's estimated 2024 EBITDA is EUR 0.63 billion, with net debt of EUR 3.39 billion.

Synergies and expected cost savings

• Enhanced operational efficiencies and know-how sharing across European assets, supporting growth in regulated returns.

• Transaction expected to increase annual net income by 2–3% and maintain financial flexibility.