NEW YORK, Nov. 20, 2000 (BUSINESS WIRE) Endesa SA (NYSE:ELE) has signed today the agreement with Charbonnages de France (CDF) to acquire a 30% interest in the French electricity generator SNET. The transaction has been authorised by the French Government.
The agreement includes Endesa’s right to increase its interest in SNET in the medium term in order to strengthen the co-operation between both companies and allow Endesa to carry out its industrial development plan in France and Europe.
SNET is the second largest electricity company in France by installed capacity and the third by electricity generation. SNET has 5 coal plants with 2,600 MW and generates 6,838 GWh annually, with a 2.5% market share in France. Additionally SNET has projects for the immediate construction of combined cycle gas turbines plants in France.
SNET is 81% owned by Charbonnages de France and 19% by EDF.
Currently, SNET sells the majority of its electricity output to Electricite de France (EDF) under the contract signed between both companies. The rest of its generation is sold to eligible customers. It is expected that SNET will gradually increase its supply to eligible customers in the coming years.
A public tender in which Endesa, Suez Lyonnaise des Eaux and RWE, among others, participated, initiated the disposal of a 30% stake of SNET. Endesa was granted with this 30% thanks to the positive valuation of its industrial and commercial project and the economic offer presented, among other parameters.
The French generator is a very interesting opportunity for Endesa and the best way to enter in the French electricity market that is starting its liberalization process, due its large experience in coal-based electricity generation, its solid technology position and its management. Additionaly, Endesa and SNET are partners in a French electricity plant in Gardanne.
Endesa expects SNET to be its vehicle to enter in the French electricity market, in which Endesa started its activities last October with a 3-year agreement to supply electricity to SEB, a small appliances company.