GasNet acquisition by CEZ not to have major impact on gas market - analysts

Prague, March 21 (CTK) - The purchase of gas company GasNet, which operates the distribution network in the Czech Republic, by semi-state energy group CEZ will not have a significant impact on the domestic gas market and nothing should change for customers, according to analysts polled by CTK.

According to most of them, the acquisition confirms the growing importance of gas for the Czech energy sector in the future, giving CEZ control over another part of the energy sector. The price of Kc21.3bn, which CEZ is to pay to Macquarie Asset Management for a 55 percent stake in GasNet, is reasonable, most of the experts agreed.

Jiri Gavor, ENA analyst and executive director of the association of independent energy suppliers ANDE, evaluated the acquisition positively. "GasNet will gain a long-term strategic investor who knows the Czech and international energy market very well and who can also bring cost synergies as a dominant electricity distributor," he said.

"CEZ is acquiring regulated assets at a reasonable price, guaranteeing a reasonable profit, which shareholders will appreciate," Gavor said. The state as the dominant shareholder of CEZ is indirectly gaining control over another strategic part of the energy sector, which is very appropriate given the challenges facing the gas industry with the need to switch to low-emission gases, Gavor added.

Lukas Kanok, head of the Energo section at Kalkulator.cz, pointed to the strategic importance of the acquisition. "The coal age is coming to an end and CEZ is clearly showing that it is counting on it and wants to make a profit. Coal produces almost half of the electricity in the Czech Republic and this part of electricity will have to be produced even after the coal-fired power plants cease operations. And the only alternative today is gas," Kanok said.

However, a substantial need for gas will lead to Czechia's greater dependence on gas imports and thus to a rise in its price, Kanok noted.

According to XTB analyst Tomas Cverna, the purchase of a majority stake in GasNet has the potential to improve CEZ's operating results and significantly help the development of alternative energy sources in the Czech Republic. "The reason is that almost three-quarters of the grid is ready to distribute hydrogen," Cverna said. The impact on consumers, on the other hand, will be minimal, he said.

According to Michal Snobr, a representative of the minority shareholders of CEZ, the cost of the acquisition must be considered in the context of the price, including debt and projected operating profits of the purchased company for the next years. "I wonder if the remaining 45 percent will be purchased," he said on the social network X.

Capitalinked.com analyst Radim Dohnal said he did not think the acquisition is a very attractive investment. "I think CEZ should focus more on power generation, where I expect major opportunities with significantly better returns than GasNet to come in a few years," he said. The acquisition does not even have significant importance for the state as the main shareholder of CEZ.

GasNet supplies natural gas to households and businesses throughout the Czech Republic, except Prague and the South Bohemia Region. It manages 65,000 kilometres of pipelines and has more than 2.3 million customers, holding approximately 80 percent of the country's gas distribution.

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