Snam to beef up hydrogen position with stake buy in De Nora

Source: Snam SpA

Italian natural gas pipeline company Snam SpA (BIT:SRG) has agreed to buy from investment firm Blackstone Group Inc (NYSE: BX) a 33% stake in Industrie De Nora SpA, which makes electrodes for applications in the hydrogen field.

Under the terms of the deal, Snam will acquire the minority interest from funds managed by Blackstone Tactical Opportunities for an enterprise value of EUR 1.2 billion (USD 1.42bn). Federico De Nora will continue to control the company following the close of the transaction in the first quarter of 2021.

Set up in 1923, De Nora is engaged in the production of alkaline electrodes, essential components for the manufacture of alkaline water electrolysers (AWE), which, in turn, are needed in the production of green hydrogen. The firm has a 34% stake in AWE developer and installer ThyssenKrupp Uhde Chlorine Engineers (TKUCE) and also has partnerships with operators in the fuel cell sector such as British alkaline fuel cells maker AFC Energy Plc.

In addition to electrodes, De Nora is also active in the water treatment field. The company generates over EUR 500 million in revenues per year and expects to record earnings before interest, tax, depreciation and amortisation (EBITDA) of EUR 90 million for 2020.

Snam said that this purchase will help it be more competitive in new hydrogen development projects and noted that De Nora’s alkaline electrolysers are complementary to the membrane electrolysers made by Snam partner ITM Power Plc (LON:ITM).

Moreover, Snam plans to be an anchor investor in a new investment platform on the energy transition that could count De Nora as a seed asset. The particular platform is to be launched next year.

"The partnership with De Nora will allow us to be a leader in the development of green hydrogen, which is becoming a key feature of the decarbonisation agenda in Italy, in Europe and in many countries around the world,” said Snam CEO Marco Alvera.

(EUR 1.0 = USD 1.183)

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