August 5, 2008

Gas Natural Signs Agreement With ACS to Acquire 45% Stake in Union Fenosa

Gas Natural has signed an agreement with Spanish construction conglomerate ACS to acquire its 45.3% stake in public utility Union Fenosa at a price of E18.33 per share in cash. The transaction is expected to result in synergies of around E300 million.

The agreement values 100% of the capital of Union Fenosa at E16.75 billion, and implies a premium of 15% over the closing price on July 29, 2008, and a 29.4% premium over the average price of Union Fenosa in the last 12 months.

According to the terms of the agreement, Gas Natural will acquire in the first instance a 9.99% stake in Union Fenosa for a total amount of E1.67 billion.

The transfer of the remaining shares, for a total amount of E5.91 billion, is subject to the authorization by the competition authorities, as well as to the authorization by the Spanish Energy Commission, or the confirmation that such authorization is not required.

Upon exceeding the 30% threshold of Union Fenosa's voting rights, Gas Natural will be obliged, within one month, to launch a public tender offer for the remaining shares of Union Fenosa, at a price of E18.33 per share in cash. This agreed price will be reduced by the gross amount of any dividend or capital distribution to Union Fenosa shareholders prior to the acquisition.