Germany has begun preliminary discussions with potential investors – including Abu Dhabi National Oil Co. – about a deal to buy the trading unit of SEFE, as the government looks at options for the future of the nationalized energy company.
The former European trading and supply unit of Gazprom PJSC, SEFE has retained a big team of traders and is expanding its LNG business through recent deals with Turkey and Argentina. The profile of the trading unit might appeal to Middle East companies wanting to get into gas markets. Separating trading out from more strategic assets like gas storage in Germany, could also make a deal easier to reach.
Government advisers and Securing Energy for Europe GmbH, known as SEFE, have held discussions with Adnoc about a possible buyout, according to people familiar with the matter who asked not to be identified discussing private talks. Conversations are focused on investors in the Middle East and Asia, said one the people.
Germany hasn’t decided yet how exactly it will exit SEFE or formally started a sales process. Talks are preliminary and cover other options like a public offering and could still fall through.
A spokesperson for the economy ministry said that the reprivatization options are being examined “from all angles”, but declined to comment on sales talks or meetings with Adnoc. Spokespeople for SEFE and Adnoc’s international investment business XRG declined to comment.
SEFE is still importing Russian LNG to Europe via France through a much-criticized legacy contract. The company has said it will end shipments in the next two years when the EU bans imports.
SEFE was nationalized in 2022 as part of a EUR 6.3 billion ($7.2 billion) rescue package in the height of the energy crisis. Bloomberg reported that the economy ministry hired JPMorgan Chase & Co. and Deutsche Bank AG to work on the privatization process.
In March last year, SEFE bought a huge German gas grid company in an effort to boost the company’s valuation before a government exit.
The European Commission has said that Germany must reduce its stakes in both SEFE and Uniper, another bailed out utility that once the country’s top buyer of Russian gas, to no more than 25 percent plus one share by 2028 at the latest.
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