Energias de Portugal, S.A. (EDP) has announced the acquisition of its gas distribution subsidiary in Spain, Naturgas Energía Distribución, S.A. (NED).

The fully funded Binding Offer has been presented by a consortium of investors comprising, amongst others, institutional investors advised by J.P. Morgan Asset Management, the Abu Dhabi Investment Council and Swiss Life Asset Managers. The offer has been submitted by Nature Investments, a special purpose vehicle set up on behalf of the consortium by Covalis Capital and White Summit Capital.

The offer for 100% of NED corresponds to a firm value of €2.59 billion (US&2.79 billion) and should result in a €2.3 billion reduction on EDP’s net debt in 2017.

With the acceptance of the Binding Offer, EDP and the consortium of investors target to sign definitive agreements in April, while the completion of the proposed transaction will be subject to the customary regulatory approvals.

NED is EDP’s subsidiary for gas distribution in Spain, comprising over 1 million supply points of natural gas and liquefied propane gas, located in the regions of the Basque Country, Cantabria and Asturias. This transaction does not include any gas supply activities, and will have no impact on EDP’s relationship with gas customers in Spain.

The proceeds from this disposal will fund the potential acquisition of the shares of EDP Renováveis, S.A. (EDPR) currently owned by minority shareholders, while the remaining proceeds will be used to continue the deleverage path of EDP by reducing its debt.