German utility STEAG acquired by Spanish firm for €2.6bn

German utility STEAG has been acquired by Asterion Industrial Partners, a Spain-based independent investment management firm focused on European infrastructure, marking their entry into the German market.

The transaction values STEAG at an enterprise value of €2.6 billion ($2.8 billion).

Asterion said it aims to support STEAG’s development from a coal-based generator into a sustainable energy generation company with its own capacities, using the strengths of STEAG Power and Iqony, a STEAG-owned renewables developer.

STEAG Power operates hard-coal-fired power plants at six locations in Germany.

Jesús Olmos, chief executive of Asterion Industrial Partners, said in a statement that STEAG "is well positioned to be a very relevant player in Germany and Europe in this process towards cleaner, more competitive and reliable energies such as solar and wind power, while offering an interesting energy mix that is also supported by coal and gas to guarantee the viability of this transition".

According to Olmos, STEAG brings with it an experienced team with technical expertise in “wind, solar, and district heating. Its energy sites have excellent infrastructure and are optimally connected to the German energy grid".

The investor also plans to significantly expand the Iqony business line, which bundles the areas of digitalisation, energy storage, renewables, hydrogen and district heating supply.

Asterion will retain Essen as STEAG’s corporate headquarters.

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Asterion expansion and renewable interests

Asterion is the main private equity and infrastructure fund in Spain and one of the largest infrastructure-focused funds in Europe, with up to €5 billion ($5.4 billion) in assets under management.

Approximately half of the firm’s previous investments have been in the energy sector.

In 2019, it launched Asterion Energies, a development platform which managed a portfolio of projects of a total of 7,700MW of renewable energy in Spain, Italy and France, which was sold to the Spanish energy company Repsol at the end of 2022.

The company remains invested in the Spanish energy sector through its investment in Barter Energy and is also present in the UK through AMP Clean Energy to develop a portfolio of decentralised heat and electricity assets.

In 2022, Asterion acquired a natural gas combined cycle power plant in France in a 50% joint venture with TotalEnergies, while an investment in energy group Sorgenia also gives them a footprint in Italy.

And this acquisition of STEAG marks the investment firm’s entrance into the German energy market, expanding their portfolio of international assets.

The purchase agreement was signed from the consortium Kommunale Beteiligungsgesellschaft (KSBG), which represents the municipal utilities of the cities of Dortmund, Duisburg, Bochum, Essen, Oberhausen and Dinslaken.

The transaction is expected to be completed by year-end, subject to customary conditions and regulatory approvals.