MILAN: Italy's largest regional power utility A2A (A2.MI), opens new tab said on Saturday it has signed a 1.22-billion euro ($1.3 billion)agreement with utility Enel (ENEI.MI), opens new tab subsidiary e-distribuzione for electricity distribution networks in Lombardy.

The agreement provides for the formation of a newly incorporated company to which e-distribuzione will contribute its electricity distribution assets in the province of Milan and and Valtrompia, A2A said, adding that it will hold 90% of this entity.

Upon completion of the sale, A2A said that the firm and e-distribuzione will also enter into a shareholders’ agreement for call and put options on the remaining 10% stake.

The deal will increase the number of A2A's installed electrical point of deliveries by approximately 70%, from about 1.3 million in 2023 to about 2.1 million, the company said.

In a separate statement, Enel - the country's largest utility - said that the transaction is expected to generate a positive effect on its 2024 consolidated net debt of about 1.2 billion euros and a positive impact on the group's 2024 reported net income of about 1 billion euros.