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Investing.com -- TenneT, the state-owned Dutch power grid operator, has started discussions with potential investors regarding the sale of a minority stake in its German division, according to a Reuters report on Wednesday. This could potentially be one of Europe’s biggest deals in 2025.

TenneT’s German branch, Tennet Germany, had a regulated asset base (RAB) valued at 27.8 billion euros ($31 billion) as of 2024. This valuation, a critical measure for energy grids, is projected to grow by 25% annually until 2029, as per an investor presentation on the company’s website.

The sale of a minority stake in the division could allow the Dutch government to raise as much as 12 billion euros, but the amount can also be significantly less, depending on the size of the stake sold and the level of debt.

The Dutch government has pledged to maintain a BBB-rated capital structure for TenneT Germany, which aligns with other German high voltage grid operators (TSOs).

Non-binding bids for the business are due by the middle of June. Several funds have shown interest in the sale, including Apollo Global Management (NYSE:APO), Canada’s Caisse de depot et placement du Quebec (CDPQ), and Macquarie. Global Infrastructure Partners (GIP), owned by BlackRock (NYSE:BLK), and the CPP Investment Board (CPPIB), which manages Canadian pension savings, are reportedly also expected to express interest.

More potential buyers could emerge, and it is anticipated that parties may join forces given the potential size of the deal. However, the transaction is not guaranteed.

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