DLA Piper advises UGI on joint venture with SHV Energy

DLA Piper has advised UGI International, a subsidiary of UGI Corporation, on the creation of a joint venture with SHV Energy to advance the production and use of renewable dimethyl ether (rDME).

The proposed joint venture was approved by the European Commission in December last year, marking an important step that enables both parties to form the joint venture and commence operations in early 2022. The joint venture is intended to gain market acceptance and accelerate the use of rDME as a renewable solution for the liquefied petroleum gas (“LPG”) industry. The parties anticipate the development of up to six production plants within the next five years, targeting a total production capacity of 300,000 tons of rDME per year by 2027. The aggregate investment in production capacity is estimated to be up to USD1 billion (approximately EUR0.9 billion) which is expected to involve third party investment.

UGI International is a leading LPG distributor and operates in 17 European countries, servicing a customer base of approximately 615,000 end-users. In 2021 UGI International serviced customers across broad markets, such as commercial and industrial, residential, agriculture, autogas and aerosol, retailing 1.7 million tons of LPG.

SHV Energy is a leading global distributor of off-grid energy such as LPG and LNG and is active in the area of sustainable fuels and renewable energy solutions. SHV Energy is a wholly owned subsidiary of SHV, a family-owned multinational, and consists of a group of specialized energy companies. With these companies, SHV Energy’s mission is to provide decentralized, low-carbon and clean energy solutions to 30 million business and residential customers who are not on the energy grid.

The DLA Piper team was jointly led by partners Richard Fens (Corporate/M&A, Amsterdam) and Dr Jan Dreyer (Antitrust, Cologne). The team further included partner Alexandra Kamerling (London), counsel Dr Enno Ahlenstiel (both Antitrust, Cologne), senior associate Laura Smit, associate Gabriël Alting Siberg (both Corporate/M&A) and legal director Martijn van Wanroij (Antitrust, all Amsterdam).