GEK Terna and Motor Oil on Thursday announced the signing of a binding agreement for the merger of their activities in the supply of electricity and natural gas and the generation of electricity from natural gas-fired units, a major deal with repercussions beyond Greece.
Specifically, Motor Oil will contribute 100% of retail power provider nrg, its 50% stake in the Komotini CCGT along with a cash amount 79 million euros. On its part, GEK Terna will contribute 100% of its retail electricity provider, Heron, and its 50% stake in Komotini CCGT, while it will receive a cash amount of approximately 128 million euros, which includes the aforementioned 79 million euros and additional cash amounts through a pre-defined permitted leakage mechanism, according to the press release.
Under the agreed framework a new corporate entity will be established, called UtilityCo, in which GEK Terna and Motor Oil will hold equal participation and voting rights. UtilityCo will eventually own Heron and nrg as well as the new natural gas fired unit (CCGT) in Komotini. Beyond Komotini CCGT, which has a capacity of 877 MW, UtilityCO will also have full control of the Heron II natural gas fired unit (CCGT) with a capacity of 441 MW, and also hold a 35% stake in the Korinthos Power natural gas fired unit with a capacity of 437 MW.
The new company will serve in total 488,000 electricity customers, representing total volume sales of about 8.3 TWh and hold a market share of approximately 17% (based on end-2024 data). Moreover, it will serve 61,000 customers of natural gas, with a respective market share of 11%.
The combination of an enlarged customer base with the most efficient portfolio of generation capacity will establish a highly effective vertically integrated structure that will have the knowhow and will be supported by GEK Terna and Motor Oil, two of the biggest groups in Greece with a proven experience in the energy sector.
Electricity demand in Greece is anticipated to increase by 2.4% CAGR up to 2030 driven by global mega-trends. Aτ the same time the local supply market remains fragmented, with sub-scale players controlling about 10%. According to the two sides, this creates a growth opportunity in the supply of electricity by capturing an addressable market of over 11TWh for the coming years. Also, the acceleration of RES penetration with the anticipated addition of about 6.0 GW of wind and PV capacity during 2025-30 will increase significantly the system needs for balancing capacity.
The transaction is expected to be completed by early 2026, pending the completion of the due diligence process as well as the receipt of relevant approvals from regulatory bodies and the general assemblies of the two stakeholders.
GEK Terna retained Mediobanca as sole financial advisor, Sioufas & Associates as legal advisor, while EY provided tax and accounting advice and services in connection with the transaction.
Motor Oil retained Morgan Stanley as sole Financial Advisor, Potamitis Vekris as Legal Advisor, while Deloitte provided tax and accounting advice and services in connection with the transaction. 1.5GW of generation capacity according to vima.com
Source: pagenews.gr