(Bloomberg) -- Italy’s Italgas SpA is nearing an agreement on a proposed €5 billion ($5.5 billion) deal to buy its largest domestic competitor, in a deal that would transform it into Europe’s biggest gas distribution network operator.
Italgas is expected to seal the accord — whose total value includes debt — with 2i Rete Gas in the coming days, according to people familiar with the matter, who asked not be named as the matter is private. Negotiations are ongoing and could still be delayed or fail to conclude with a deal, they said.
Italgas shares reversed earlier gains in Milan on Friday, and traded down 0.4% at 3:38 p.m. local time.
Following the acquisition, the biggest ever for the company, Italgas would control a 155,000 kilometer-long network in Europe. Its main shareholder, state lender Cassa Depositi e Prestiti SpA, is backing the bid.
Representatives for Italgas and for 2i Rete Gas’s main shareholder, F2i SGR, declined to comment.
The acquisition would put Italgas in control of more than 50% of the Italian market, according to Bloomberg Intelligence.
Italgas shareholders were granted an exclusivity period to file a binding offer in May, the company said at the time.
While Italian competition regulators will examine the deal, details won’t be discussed until after an agreement is reached, the people said.
Italgas Chief Executive Officer Paolo Gallo said in June he’s “very confident” the deal will be approved by regulators.
Gallo also said at the time that a capital increase needed to finance it remains under assessment. Italian media outlets have reported that €1 billion in capital may be required.
(Updates with shares in third paragraph.)
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