January 23, 2020 / 3:07 PM / a month ago

Germany's BayWa in talks to sell renewables stake to Credit Suisse: sources

FRANKFURT (Reuters) - German agriculture group BayWa BYWGn.DE is in advanced talks with Credit Suisse (CSGN.S) over the sale of a minority stake in its renewables business for a potential value of 2 billion euros ($2.2 bln) including debt, two people familiar with the matter said.

FILE PHOTO: A power-generating wind turbine is seen near the city of Halle, Belgium, November 19, 2019 REUTERS/Yves Herman/File Photo

BayWa has for months been seeking a buyer of a stake in BayWa r.e. renewable energy GmbH and in December said it expected to conclude the process in the first quarter.

BayWa said negotiations continue, but declined to be more specific. Credit Suisse had no immediate comment.

The deal is expected to give the unit an equity value of about 1 billion euros, one of the people said, and would be the latest addition to Credit Suisse’s growing portfolio of renewable assets in Europe.

The bank, via its unit Credit Suisse Energy Infrastructure Partners, last year bought 80% of Fortum’s (FORTUM.HE) Nordic wind portfolio and a 25% stake in the Arkona offshore wind farm from Norway’s Equinor (EQNR.OL) for a combined 750 million euros.

Credit Suisse prevailed in the auction against groups such as DWS (DWSG.DE) and EQT (EQTAB.ST), the sources said, adding there was no certainty a deal would be reached.

BayWa said in April it was looking for a minority investor, which could take 40-49% in the renewables energy subsidiary to fund new solar and wind projects.

The company said then it had invested 1.5 billion euros in renewable energy projects. It has built and sold solar, wind and bioenergy projects with a capacity of 2.8 gigawatts (GW) and managed 7 GW worldwide.

BayWa is an agricultural trading, logistics and services company, majority-owned by Germany’s cooperative Raiffeisen group. Its energy unit, which also includes fossil fuel sales, generated a fourth of the group’s 16 billion euros of sales in 2018.

In the first nine months of 2019, BayWa r.e. posted a profit before interest and taxes of 4 million euros on sales of 1.1 billion with plans for 2019 of selling projects with a capacity of more than 650 megawatts, compared to 450 megawatts in 2018.

Over the last decade, BayWa has become increasingly active in renewable energy, partly through the acquisition of project developer Renerco and solar distributor MHH Solartechnik.

($1 = 0.9014 euros)

Reporting by Arno Schuetze and Christoph Steitz; additional reporting by Oliver Hirt in Zurich and Alexander Huebner in Munich; editing by Thomas Seythal

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