MILAN (Reuters) - Italian utility Iren has made a non-binding expression of interest in a tie-up with northern utility CVA in a move that would create one of Italy’s biggest hydroelectric players, Iren’s chief executive said on Tuesday.
“We are waiting for a technical table to be opened to work out just how such a tie-up could be done,” Massimiliano Bianco told Reuters at a conference.
CVA, owned by the northern region of Valle d’Aosta, could be worth up to 1.2 billion euros ($1.36 billion).
Rome has promoted mergers and acquisitions in Italy’s fragmented utility sector for several years to help boost competitiveness.
Iren, which is controlled by a group of cities in Italy’s north including Turin and Genoa, has more than 600 megawatts (MW) of hydroelectric capacity.
CVA has almost 1,000 MW as well as solar, wind and power distribution assets.
“The idea is to put together our hydroelectric assets to become the country’s second or third largest operator,” Bianco said.
The public owners of CVA have set up a commission to look at the best options for growth of the utility. These include a possible stock market listing as well as a tie-up with another player.
CVA Chief Executive Enrico De Girolamo told Reuters at the same conference the commission had until March 31 to draw up its conclusions. He confirmed CVA was also discussing Iren’s offer.
“Valuations of CVA range from 800 million to 1.2 billion euros,” he said.
Reporting by Stephen Jewkes; editing by Jason Neely