API takes over 2600 TotalErg service stations

Milan - TotalErg becomes API. Italy’s gas distributor, which for years was known by its brand logo of a black horse, rivalling ENI’s six-legged dog and with Esso’s ‘tiger in the engine’, is now taking over the entirety of TotalErg, the 49:51 joint venture between Total and ERG, in a deal valued at over 450 million euro, 273 million of which is to be paid to ERG. API is thus enriched by adding 2,600 service stations to its distribution network, its logistics hub in Rome, and a 25.16% stake in a refinery at Trecate near Novara. A network that now boasts 5,000 fuel outlets across Italy, overtaking in number ENI’s near 4,200 gas stations, if not in overall sales volume.

API’s total revenues, including its refinery business, will now be about 6 billion euro, compared to 2.3 billion in 2016. Conversely, for ERG, it’s farewell to oil, as expressed by its CEO Luca Bettonte speaking of “a definitive exit of the ERG group from the oil business”, as it shifts its focus onto renewables.

The transaction should conclude by the end of January, pending the approval of the Antitrust authority, and the completion of an exit strategy that sees the movement of its lubricants division to Total Italia, on the back of a binding agreement signed between ERG and Total Marketing Services, with the former selling its 51% stake to the Total Group.

In this way, TotalErg ceases to exist, following its August 10th sale of its heating services operator subsidiary Restiani to Aber and the Ambienta Fund, and last month’s sale of its LPG retailer Totalgaz Italia to UGI Italia.

According to API President Ugo Brachetti Peretti, the transaction “raises API’s production, logistics, and business profile to the level necessary to pursue our development strategy; with a refining capacity of about 6 million tonnes of oil per year”. Moreover, API will be able to deploy “its logistics network on both Tyrrhenian and Adriatic shores.” ERG was assisted by HSBC, DLA Piper and Ernst & Young, while API by Unicredit, UBI Banca, Banco BPM and Bonelli Erede. Total, meanwhile, relied on Rothschild.