UPDATE 1-Total picks Snam-led group for talks on gas unit sale
* Snam offer values TIGF at 2.4 bln euros
* Group also includes Singapore's GIC and France's EDF
PARIS Feb 5 (Reuters) - French oil major Total said it picked a consortium led by Italian gas transport group Snam for exclusive talks on the sale of its TIGF gas network business.
Snam's offer values the business at 2.4 billion euros ($3.25 billion), Total said on Tuesday. Snam has teamed up with Singapore's GIC sovereign wealth fund and French power group EDF.
"The consortium selected, consisting of industry-leading operators and long-term investors, will support TIGF in its further development, while meeting the commitments made to TIGF's employees and partners," Total Chief Executive Christophe de Margerie said in a statement.
The sale of TIGF is part of Total's plan to shed 15 to 20 billion euros in assets by 2014 to help it finance investments in other areas, such as exploration, and boost cash flow.
The transaction had been expected to fetch up to 3 billion euros, but sources close to the process said last week that bids were likely to be nearer 2 billion euros due to a subdued outlook for gas demand and overcapacity.
Total's efforts to sell TIGF have drawn government scrutiny given the network's status as an employer at a time of high joblessness. Unions oppose the sale and want guarantees on the preservation of the group's headquarters in Pau, in southwestern France, as well as the jobs of its 500 employees.
Total said it signed an agreement on Jan. 23 containing "provisions concerning maintaining jobs, benefits and TIGF's headquarters in Pau".
TIGF manages a network of about 5,000 kilometers of pipeline that carries 13 percent of the total volume of gas transported in France and operates 22 percent of the country's gas storage capacity, according to Total.
It had 2011 revenue of more than 350 million euros.
The Snam-led consortium was chosen ahead of a group bringing together Belgian gas company Fluxys and French state bank Caisse des Depots (CDC), alongside AXA Private Equity , Credit Agricole's Predica insurance unit, CNP Assurances and the Abu Dhabi Investment Authority.
Spanish firm Enagas had withdrawn from the race.
Snam represents 45 percent of the chosen consortium, GIC 35 percent and EDF 20 percent through its fund for the dismantling of nuclear plants.
- Sierra Leone's chief Ebola doctor contracts the virus
- Gaza bloodshed deepens as airlines shun Israel |
- Exclusive: Ukraine rebel commander acknowledges fighters had BUK missile
- TransAsia Airways plane crashes in typhoon-hit Taiwan, killing 47 |
- South Korea ferry fugitive hid behind cabin wall, bags of cash at hand