Snam S p A: Eni and Snam launch a partnership on gas pipelines between Algeria and Italy

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PRESS RELEASE

Eni and Snam launch a gas pipeline partnership between Algeria and Italy

Eni undertakes to sell to Snam a 49.9% stake in its subsidiaries operating the TTPC and TMPC pipelines

for an amount of 385 million euros

San Donato Milanese (Milan) – November 27, 2021 – Eni and Snam have reached an agreement for the sale by Eni to Snam of a 49.9% stake (held directly and indirectly) in certain companies operating two groups of international pipelines connecting Algeria in Italy. The scope of the transaction includes in particular onshore gas pipelines stretching from the Algerian and Tunisian borders to the Tunisian coast (TTPC), and offshore gas pipelines connecting the Tunisian coast to Italy (TMPC)1.

In accordance with the agreement, Eni will contribute its entire stake in both pipelines to a newly incorporated Italian company (NewCo) in which Eni will continue to hold a 50.1% stake, while the remaining 49.9%2 will be sold to Snam for a purchase price equal to 385 million euros. Snam will finance the payment of the purchase price with its own financial resources.

The transaction will create synergies between the respective areas of expertise of the parties in gas transportation on a strategic route for the security of natural gas supply in Italy, enabling potential development initiatives within the value chain of hydrogen from North Africa.

Eni CEO Claudio Descalzi commented: “This operation allows us to free up new resources to be used on our energy transition trajectory, while maintaining the management of a strategic infrastructure with Snam to ensure the security of the country’s natural gas supply. Gas will play a key role. role in the transition of energy systems to zero emission models, and it is important to maintain the availability and diversification of supply routes for this resource.

Marco Alverà, CEO of Snam, said: “This agreement consolidates the central role of Snam in the security of supply to Italy as well as in the transport of energy from the Mediterranean region. Through this transaction, Snam is bridging its infrastructure and North Africa, which represents a key area for gas supply to Italy and turned towards the future. development of hydrogen. In the future, North Africa could also become a hub for the production of solar energy and green hydrogen.

  1. In particular, the participations included in the scope of the operation include: (i) the entire share capital of Trans Tunisian Pipeline Company SpA, the company which holds the exclusive right to market the natural gas transmission capacity of the land pipeline ; (ii) 99.85% of the share capital of Scogat SA, a company carrying out extension work or other interventions on the on-shore gas pipeline; (iii) 65.4% of the capital of Sergaz SA, a company providing operation and maintenance services for the on-shore pipeline and holds 49.9% of the capital of Premium Multiservices SA; (iv) 50% of the share capital of Transmediterranean Pipeline Company Ltd, owner of the offshore gas pipeline; (v) 50% of the share capital of Transmed SpA, owner of the exclusive right to market the natural gas transmission capacity in the offshore gas pipeline; (vi) 50% of the share capital of Mariconsult SpA, a company providing operation and maintenance services for the offshore gas pipeline; and (vii) 5% of the share capital of Samco Sagl, a company providing services for the offshore gas pipeline.
  2. Raised to 50% of NewCo’s share capital in the event of application of certain conditions according to the agreement after payment of a prorated amount of 385 million euros

The transaction supports Eni’s broader strategy to optimize its portfolio and accelerate growth in sectors linked to the energy transition. Snam will benefit from its position on a strategic route for the security of natural gas supplies to Italy and the opportunity to support potential developments within the hydrogen value chain also through natural resources in Africa. North.

The agreement also provides for an earn-in and earn-out mechanism that will be calculated on the basis of the revenues that will be generated by the target companies. The target companies generated a net income (100% of Eni’s stake) of approximately 90 million euros in 2020.

Eni and Snam will exercise joint control over NewCo, on the basis of principles of equal governance and the two companies therefore consolidate NewCo using the equity method.

The closing of the transaction is subject to certain conditions precedent, including mandatory authorizations under antitrust and “golden power” regulations and other relevant regulatory authorities, in addition to authorization from the Tunisian government and consent and / or the approval of shareholders and boards of directors of certain target companies. Taking into account the postponement of the closing to allow the fulfillment of the conditions precedent, a payment commission will accumulate on the counterparty from the date of the reference balance sheet (June 30, 2021), to be paid by Snam to Eni at the time of the closing of the transaction.

Subject to the fulfillment (or, where applicable, waiver) of the conditions precedent provided for in the contract, the transaction should be finalized by the third quarter of 2022.

Related party transaction

The transaction is carried out between related parties in accordance with article 3 of the regulations adopted by Consob by resolution n. 17221 of March 12, 2010, as amended and supplemented thereafter (the “Consob RPT Regulation“) and (I) Annex 3 of “Guidelines for transactions with the interests of directors and auditors and transactions with related parties“adopted by the Board of Directors of Snam on November 30, 2010 and last amended on July 15, 2021 (the”Snam guidelines“), as good as (ii) Appendix C of the Eni Procedure “Transactions in the interest of Directors and Statutory Auditors and Transactions with Related Parties” (“the Eni procedure“), adopted by the Board of Directors of Eni on May 27, 2021, as Cassa Depositi e Prestiti SpA (“CDP“) holds : (I) directly, an equity investment representing 25.96% of the share capital and voting rights of Eni; (ii ) indirectly (through CDP Reti SpA, in which it holds 59.1% of the capital), an equity investment representing 31.35% of the capital and voting rights of Snam.

The transaction is considered a “less material” transaction between related parties for Eni in accordance with article 7 of the Consob RPT regulation and article 5 of the Eni procedure. In particular, the board of directors of Eni approved the transaction, after having received the motivated favorable opinion of the control and risks committee of Eni on the interest of Eni in carrying out the transaction, as well as on the appropriateness and substantial fairness of the conditions relating thereto.

The transaction is qualified as a “transaction of greater importance” between related parties for Snam in accordance with article 8, paragraph 1 of the Consob RPT regulation and article 4 of the guidelines, as a materiality index relating to the value of the transaction as defined in Annex 3 of the Consob RPT regulation and annex 1 of the Snam directives are greater than 2.5%.

Consequently, Snam has activated the controls and measures provided for in article 8 of the Consob RPT regulation and in article 4.2 of the Snam guidelines for “transactions of greater importance” with a

related party. More specifically, Snam’s board of directors approved the transaction, after receiving a motivated favorable opinion from the Snam Risk Control Committee and Related Party Transactions on Snam’s interest in completing the transaction, as well as only on the convenience and substantial accuracy of the relevant terms.

Snam will publish, under the conditions set by the Consob RPT Regulation and in the Snam Directives, the information document concerning the transaction relating to transactions of greater importance with related parties, drawn up in accordance with article 5 and according to the format provided for in article Annex 4 of the Consob RPT regulation, as well as under article 4 of the Snam guidelines.

Eni company contacts:

Press office: Phone. +39.0252031875 – +39.0659822030

Free phone for shareholders (from Italy): 800940924

Free phone for shareholders (from abroad): + 80011223456

Switchboard: + 39-0659821

[email protected]

[email protected]

[email protected]

Website: www.eni.com

Snam contact details Phone. : +39 02 37037273 [email protected] www.snam.it

Disclaimer

SNAM SpA published this content on November 27, 2021 and is solely responsible for the information it contains. Distributed by Public, unedited and unmodified, on November 27, 2021 09:09:03 AM UTC.

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