PGGM and Shell explore potential joint acquisition of Eneco
PGGM and Shell have joined forces to explore the opportunity to participate in the controlled auction for the sustainable energy provider Eneco. In December 2018 Eneco and its shareholders’ committee announced the start of the privatisation process.
This consortium is impressed with Eneco’s achievements in transforming the Dutch energy system through investments in sustainability and renewable energy. PGGM and Shell combine the knowledge, ambitions and financial commitment to build on Eneco’s sustainable strategy and are determined to competitively grow the renewable energy products and services offer for millions of customers in North West Europe.
With their roots in Dutch society, both PGGM and Shell understand Eneco’s unique position in taking on the challenges and opportunities of the energy transition. The consortium envisages that Eneco will be a platform for growth, operating from Rotterdam, with potential investments inside and outside of the Netherlands. Eneco could realise this as a separate entity, leveraging a strong identity, durable customer relations and a committed and experienced workforce within the company.
“The energy transition offers good opportunities for long-term investments in a more sustainable economy and we think Eneco can play a central role in realising the consortium’s shared ambitions. PGGM and Shell bring complementary experience and expertise across Eneco’s activities, which will support the delivery of affordable sustainable energy to a growing number of customers in North West Europe,” says Frank Roeters van Lennep, Chief Investment Officer Private Markets PGGM.
Through its existing business and activities Shell offers access to clean-tech research and development, connected mobility and digital start-ups as well as a substantial number of partners and customers. “This provides opportunities along the entire energy value chain, from generation of renewable power to trading and delivery at home, on the road and at work,” says Shell’s Integrated Gas & New Energies Director Maarten Wetselaar. “Eneco’s business neatly fits with Shell’s New Energies activities and ambitions to continuously find new ways to reduce carbon emissions and provide more and cleaner energy. The consortium is committed to expand and develop business models that create both societal and commercial value.”
PGGM sees sustainability as a cornerstone of its investment policy for Dutch pension capital, investing for the long term in the energy transition around the world. As pension fund investor PGGM aims to combine sound financial returns on investments with tangible societal returns. Eneco would greatly add to PGGM’s growing global portfolio of sustainable investments which provide concrete climate solutions (currently valued at over 8 billion dollar), lower the carbon footprint of pension capital and offer a unique chance to invest directly in the Dutch economy.
Shell is amplifying its role in the energy transition with increasing levels of investments in offshore wind, solar, e-mobility, and the power sector. Shell established its New Energies business to create business opportunities in the transition to a low-carbon future. Any potential investment should competitively fit within the company’s strategy and financial framework and stated capital investment guidance range of USD 25-30 billion per annum.
The consortium partners understand that Eneco will be brought to the market via a controlled auction, subject to shareholder approval. PGGM and Shell realise this process is at an early stage and respect that it is up to the shareholders to determine the next steps in the sale process. The consortium looks forward to further assessing the potential opportunity and has shared an open letter further outlining its intent.
About PGGM
PGGM is a cooperative Dutch pension fund service provider. Institutional clients are offered: asset management, pension fund management, policy advice and management support. On June 30, 2018 PGGM had EUR 215 billion in assets under management and was administrating pensions of 4.2 million participants. Around 750,000 workers in the Dutch healthcare are connected to PGGM&CO, the members organization. Either alone or together with strategic partners, PGGM develops future solutions by linking together pension, care, housing and work.
About Shell New Energies
Shell’s New Energies business builds on the experience in lower-carbon technology and explores new commercial models focused on the world’s energy transition. Shell aims to make electricity a significant part of its business, from generating it to buying, selling and supplying electricity directly to customers. Its New Energies business is seeking to leverage the company’s strengths in fast-growing and commercial parts of the energy industry.
