Yahoo Finance Eni (E) CEO Confirms Enilive Stake Sale Completion by 2024 End
Eni SpA E, the Italian energy giant, is gearing up to finalize the sale of a minority stake in its biofuel subsidiary, Enilive, by the end of 2024. This strategic move, confirmed by CEO Claudio Descalzi, is part of Eni's broader initiative to restructure and optimize its business portfolio, per a Reuters report.
Accelerating Plans for Enilive
During a conference organized by Il Giornale in Milan, Descalzi updated on the progress of the sale, noting that while some issues are still being discussed, the deal is set to be closed by the end of this year as talks have accelerated. This marks a significant step forward since the initial April report about the potential sale of stakes in Enilive and Novamont, Eni's bioplastic unit, which together could yield approximately 1.3 billion euros.
Strategic Realignment and Investment
The sale is a crucial element of Eni's strategic realignment. E aims to create distinct entities, referred to as 'satellites,' for its various business operations, enhancing the company’s development through investments from financially robust partners. This approach mirrors the strategy employed in the sale of a stake in Plenitude, Eni's retail and renewable unit.
Descalzi elaborated that when the strategy was announced in March, the company was expecting to close the deal a little further ahead, but he now sees that there’s a good chance of doing so by the end of this year, using the same approach as in the case of Plenitude.
The reference to Plenitude is significant. Earlier this year, Eni successfully sold a minority stake in Plenitude to Energy Infrastructure Partners, a Swiss asset management firm. This deal valued Plenitude at around 10 billion euros, including debt, showcasing Eni's effective strategy in monetizing parts of its business to fuel further growth and innovation.
Implications for Eni's Future
The planned sale of Enilive's minority stake is expected to attract substantial interest from investors looking to capitalize on the growing biofuel market. This move aligns with Eni's ongoing efforts to transition toward more sustainable energy sources and reduce its carbon footprint.
By structuring its businesses into satellite entities and securing investment from deep-pocketed partners, Eni is positioning itself to navigate the evolving energy landscape more effectively. The successful completion of this sale would not only strengthen Eni's financial position but also reinforce its commitment to sustainability and innovation.
Conclusion
Eni's strategic decision to finalize the sale of a minority stake in Enilive by the end of 2024 represents a pivotal step in its broader initiative to optimize and restructure its business portfolio. Descalzi's update highlights the accelerated pace of negotiations, aiming to replicate the successful strategy employed in the recent Plenitude stake sale. This move not only aims to attract significant investments to fuel growth but also aligns with Eni's commitment to sustainability by focusing on biofuel development. By establishing 'satellite' entities and leveraging partnerships with robust investors, Eni is set to enhance its competitive edge in sustainable energy solutions.
Zacks Rank & Key Picks
E currently has a Zack Rank #3 (Hold).
Investors interested in the energy sector may look at some better-ranked stocks like Archrock Inc. AROC, Sunoco LP SUN, and SM Energy Company SM. While Archrock and Sunoco sport a Zacks Rank #1 (Strong Buy) each, SM Energy carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Archrock is an energy infrastructure company based in the United States, with a focus on midstream natural gas compression. It provides natural gas contract compression services and generates stable fee-based revenues.
The Zacks Consensus Estimate for AROC’s 2024 EPS is pegged at $1.07. The company has a Zacks Style Score of A for Growth. It has witnessed upward earnings estimate revisions for 2024 and 2025 in the past 60 days.
Sunoco is a leading wholesale motor fuel distributor in the United States, boasting a vast distribution network spanning 40 states. With long-term contracts servicing more than 10,000 convenience stores, it distributes over 10 fuel brands, ensuring a stable revenue stream. SUN currently has a Value Score of A.
The Zacks Consensus Estimate for 2024 and 2025 earnings per unit is pegged at $7.29 and $7.17, respectively. The partnership has witnessed upward earnings estimate revisions for 2024 and 2025 in the past 30 days.
SM Energy is set to expand its oil-centered operations in the coming years, with an increasing focus on crude oil, especially in the Permian Basin and Eagle Ford regions. The company’s attractive oil and gas investments should create long-term value for shareholders.
The Zacks Consensus Estimate for SM’s 2024 EPS is pegged at $6.63. The company has a Zacks Style Score of A for Value. It has witnessed upward earnings estimate revisions for 2024 in the past 30 days.
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