France's Engie, Credit Agricole to buy Spain's Eolia Renovables

The logo of French gas and power group Engie is seen in Bouguenais near Nantes, France, October 5, 2020. REUTERS/Stephane Mahe

PARIS/MADRID, Nov 11 (Reuters) - Gas and power group Engie (ENGIE.PA) and French bank Credit Agricole (CAGR.PA) said on Thursday they had agreed to buy Spanish renewable energy group Eolia Renovables.

The deal highlights growing investor appetite for renewable energy assets in Southern Europe, which is leading to higher market valuations in the sector.

The French firms said in a joint statement that they had agreed to buy 97.33% of Eolia Renovables' capital from Canadian investment fund Alberta Investment Management Corporation. They did not disclose financial details of the purchase.

But a source familiar with the matter told Reuters that the enterprise value of the deal was just above 2 billion euros.

Former French gas monopoly Engie this month announced the 7 billion euro ($8 billion) sale of technical services group Equans to Bouygues (BOUY.PA) and said it would use the proceeds of asset sales to invest in renewables.

A large chunk of Eolia's assets were built under previous Spanish regulations that still guarantee a fixed long-term rate for the power they generate.

Engie, whose shares were up 2.6% in early market trading in Paris, will own 40% of Eolia's assets and Credit Agricole 60%.

($1 = 0.8648 euros)

Reporting by Gwenaelle Barzic and Isla Binnie; Writing by Michel Rose; Editing by David Goodman and Alexander Smith

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