Chapter 812 Power Group

The current United Energy Group has a number of businesses, including oil and gas exploration, natural gas transportation and storage (British Gas), and power generation and power distribution (British Distribution).

Their British Gas Company previously entered the French natural gas market by acquiring Total Gas Infrastructure (TIGF) under Total Energy of France. After being acquired by British Gas, TIGF became their branch in France and currently occupies about 20% of the French natural gas storage and transportation market.

If the United Energy Group's entry into the French market through the acquisition of TIGF is not too large, then this time the purchase of shares in Enel is a very large investment.

Because Enel SpA can be said to be a giant company. It ranked fourth among power companies in the Fortune Global 500 list released last year. It is the second largest power company in Europe after EDF, with a current market value of $50 billion!

According to the current market value alone, the 32% stake held by Rhein Energy Group is worth more than $16 billion!

Moreover, to complete this acquisition, United Energy Group will have to pay a certain premium - for a monopoly power company like Enel, every share transaction will be a highly anticipated event.

In order to complete this acquisition, United Energy Group will issue corporate bonds with a total value of US$10 billion to its major shareholders, and take out nearly US$10 billion from its own profits to pay for this acquisition.

Of course, most of the corporate bonds they issue will be purchased by funds under the DS Group.

After all, this time, they have made huge profits from the European sovereign debt crisis and the previous short-selling actions in Japan and South Korea, and now they need to invest these profits in the acquisition of high-quality assets.

This is also the reason why Hugo, as the chairman of API Petroleum Group, is so enthusiastic about Barron.

After all, API Petroleum Group is not among the top oil companies in Italy, and its scale is not comparable to that of Enel. Enel is the third largest company in Italy, second only to ENI and UniCredit Bank...

Even the market value of Fiat Group owned by Beatrice's second brother-in-law John Elkann is much higher than API Petroleum Group...

After all, Fiat Group is the seventh largest company in Italy, with a market value of about 13.5 billion US dollars!

The main business of API Petroleum Group is the manufacture and sale of petroleum products. They have widely distributed gas stations in Italy and their own crude oil refining plants, which are downstream enterprises in the oil industry.

Before this, API Petroleum Group also cooperated with United Energy Group, and some of their refined oil and crude oil were purchased from United Energy Group.

United Energy Group also deployed some gas stations in Ireland, Britain and France through acquisitions and new construction, and controlled some downstream sales.

But for now, these are still not the main industrial directions of United Energy Group.

In fact, this time, the acquisition of shares of Enel by United Energy Group is not as simple as it seems on the surface, just to get shares of this company.

Among the shareholders of Enel, the Italian government holds the most shares, holding 32.4% of the shares, just slightly higher than the 32% held by Rhein Energy Group.

But Rhein Energy Group has never been able to cross this gap of only 0.4% of the shares - any increase in their shareholding ratio on this basis requires the consent of the Italian government.

It is obvious that the Italian government will not give up its control of Enel, which is why Rhein Energy Group finally gave up and prepared to sell these shares.

In addition to owning distribution networks and related power stations in Ireland and the UK, British Power Distribution, a subsidiary of United Energy Group, also owns 40% of the shares of British Energy Group, the main nuclear power plant operator in the UK. In addition, British Power Distribution also owns power stations and distribution networks in Australia and Southeast Asia.

It can be said that the British Power Distribution Company has become one of the largest power companies in the whole of Britain. After completing the acquisition of 32% of the shares of Enel, United Energy Group will try to persuade the Italian government to merge the British Power Distribution Company with Enel, thereby creating a power group with business in many European countries, Australia and Southeast Asia, which will surpass the French Electricity Company and become the largest power group in Europe.

I believe that the Italian side should still be interested in this proposal, even if the Italian government will lose its controlling stake in the company at that time.

But after all, it is now in the period of the European debt crisis, and the situation in Italy is probably not much better...

The current Prime Minister of Italy is still Berlusconi, but Barron knows that he will resign as Prime Minister in November this year.

The reason is that the Italian sovereign debt crisis is getting worse and worse. Faced with a serious economic crisis, Berlusconi has no way to deal with it properly and eventually resigned.

At that time, the Italian bond interest rate soared to 7.5%, making Italy unable to repay its debts, and also dragged Spain, Portugal and other countries and even the entire eurozone into crisis.

Now it is July, and there are only a few months away. I believe that by that time, let alone agreeing to the merger of the two power groups, even selling the government-held shares of the Italian National Electricity Company will not be unacceptable to the Italian government, which is in urgent need of funds...

"In fact, in addition to the Italian National Electricity Company, including the Italian Natural Gas Company and some Italian banks are all assets that can be acquired..."

Before coming to Italy, Barron had a relevant conversation with Daisy. At that time, he said:

"We also have relevant short-selling actions in Italy. Buying when the stock prices of some companies are low will turn our profits into real assets."

England-France-Italy-Germany, these will be the core part of Europe, and will also be the areas where some industries he controls are focused on.

After controlling this area, spreading to other countries will achieve twice the result with half the effort.