MILAN (Reuters) - Italy’s Finmeccanica SIFI.MI has reached a preliminary agreement to sell a majority stake in power unit Ansaldo Energia to South Korea’s Doosan Heavy Industries (034020.KS), a source with direct knowledge of the situation told Reuters.
The draft deal places an enterprise value of between 1.2 billion euros and 1.4 billion euros ($1.8 billion) on the whole of Ansaldo Energia, which produces gas turbines and employs about 3,000 people in Italy.
“Ansaldo Energia has its partner and it’s Doosan,” the source told Reuters, adding that the deal still needed Italian government approval.
Finmeccanica said in a statement later on Wednesday it had not yet signed a binding agreement in ongoing talks to sell Ansaldo Energia, without naming a buyer.
More than one year ago Finmeccanica, Italy’s second largest employer, singled out Ansaldo Energia among the assets it wanted to sell to cut its debt pile.
But the defense and aerospace group has struggled to carry out the planned sales due to political opposition to foreign takeovers as a protracted economic crisis forces many Italian entrepreneurs to put their businesses on the block.
Finmeccanica is 30 percent owned by the Italian state and needs government backing for sensitive strategic issues like disposals.
Last week, Industry Minister Flavio Zanonato reiterated he was against selling Ansaldo Energia and other Finmeccanica assets, preferring instead partnership agreements.
The planned deal, the source told Reuters, envisages Doosan buying a 45 percent stake held by U.S. fund First Reserve in Ansaldo Energia. Finmeccanica or another Italian investor, possibly the state-backed Italian Strategic Fund (FSI), would keep a minority stake which could be reduced.
“Talks are at an advanced stage. Finmeccanica will initially keep around 30 percent in Ansaldo Energia and then gradually reduced it,” a second source briefed about the talks said.
Finmeccanica controls 55 percent of Ansaldo Energia, with the rest in the hands of First Reserve. The U.S. fund bought its stake a couple of years ago for around 500 million euros.
The companies involved had no immediate comment.
Shares in Finmeccanica rallied on the news and were suspended after rising 5.68 percent to 4.13 euros.
($1 = 0.7601 euros)
Additional reporting by Danilo Masoni, Editing by Luca Trogni, Elaine Hardcastle and David Evans