French Infra Major VINCI Completes Buy of Spanish Energy Firm Cobra IS

French concessions and construction company VINCI has completed the acquisition of Spanish construction major ACS’s energy business, Cobra IS, following an agreement signed between the two companies in April last year. The move also adds a fresh, stronger player in the EPC end of the global renewables sector in the form of the stronger entity that VINCI becomes now. VINCI, which has been a major infra player till date, has recently started focusing more on the green energy sector. The operator of multiple toll roads and Airports had finished 2020 with net profit came at 1.24 billion euros ($1.49 billion) in the full year .Revenue was EUR43.23 billion in 2020.

The final purchase price of €4.9 billion, financed entirely through internal accruals by VINCI, places a value of €4.2 billion initially agreed by the parties, plus €700 million relating to cash held by the new unit and various adjustments.

The acquisition covers:

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• Most of the contracting business of the ACS Industrial Services division;
• Nine greenfield concession1 projects under development or construction, mainly electrical transmission networks in Latin America
• The renewable energy project development platform.

For VINCI, the acquisition means access to key markets like the Iberian Peninsula and Latin America, where ACS was present, besides added expertise from Cobra IS in building up its renewable assets portfolio, which it hopes to scale upto 15 GW on the back of solar and offshore wind assets. For infra firms worldwide, renewable assets, with their concession periods of upto 25 years and predictable income streams offer the next big opportunity for growth, even as other Infra building in developed markets slows.

ACS will receive an earn-out payment of €40 million for each GW of ready-to-build renewable energy capacity developed by Cobra IS over a period of 8.5 years, up to 15 GW, resulting in a maximum additional payment of €600 million.

VINCI and ACS have also finalised a joint venture agreement, providing for the creation of a new entity that will have the right to buy, at market price, renewable energy assets developed, financed, built and connected to the grid by Cobra IS. VINCI will own 51% of this entity, which will be fully consolidated in VINCI’s financial statements.

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