E.ON AG (EOAN.XE) said Monday it has agreed to sell its Italian natural gas distribution network company E.ON Rete to a consortium of Italian and French financial investors.

The deal values the gas grid unit at around EUR290 million, and will result in cash proceeds of around EUR255 million, the German utility said in an emailed statement

E.ON said that the buyers are Italian infrastructure investment fund F2i SGR SpA and Axa Private Equity, a unit of AXA SA's (CS.FR) multi-expert asset management company AXA Investment Managers. They are taking 75% and 25% stakes respectively.

Acquisition finance is being provided by Banca IMI, Crédit Agricole CIB, HSBC Bank PLC (HBC), Banco Santander SA (STD), Société Générale SA (SCGLY) and UniCredit SpA (UCG.MI). Banca Leonardo, HSBC, Banca IMI and UniCredit acted as as financial advisors to the buyers.

The deal comes just one year after F2i and Axa bought Enel SpA's (ENEL.MI) Italian natural gas transmission network as the two buyout firms continue with their plans to focus on developing the distribution network of energy and systems in Italy and more broadly in Europe .

Following completion of the deal with E.ON, F2i and AXA Private Equity will have an increased presence in the gas distribution industry, with more than 2.7 million clients and a market share of 15.8%, the firms said.

The sale is part of E.ON's plan to sell EUR15 billion worth in assets by the end of 2013 to refocus the company and reduce debt.

It is the second time E.ON has attempted to sell the business. In April 2010 it stopped a first attempt, saying that bidders failed to come up with attractive offers for the asset.

E.ON said it expects the transaction to close by the end of the first quarter of 2011, adding that it still requires antitrust approval.

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