HomeCourt of Arbitration settlement sets out terms for sale of Bewag

Court of Arbitration settlement sets out terms for sale of Bewag

At its annual press conference this week, the German industrial group E.ON announced the settlement of the dispute between its subsidiary, E.ON Energie and Mirant over the sale of its interest in Berlin utility Bewag. The disposal of its 49 per cent stake in Bewag was one of the conditions imposed when Veba and Viag were merged to form E.ON.

E.ON had originally intended to dispose of its interest in Bewag to Hamburg utility HEW whose majority shareholder is the giant Swedish utility Vattenfall. The deal was halted in August 2000 when authorities in Berlin and US power group Southern Energy raised objections and obtained an injunction. Southern Energy, (since renamed Mirant), hold a 26 per cent stake in Bewag and the settlement of this dispute by way of arbitration means that Mirant will have an equal interest in Bewag along with HEW. It is intended that E.ON will dispose of its 49 per cent interest to HEW, who in turn, has agreed to sell 17 per cent of its stake to Mirant.

The Berlin Senate must still ratify the deal between the parties and if this is not obtained either E.ON or Mirant can revoke the settlement.

With the disposal of its interest in Bewag, E.ON will have largely met the antitrust provisions and obligations made to obtain approval of its merger. E.ON Energie is now present in 15 European countries as an energy supplier and service provider. It recently announced a take-over bid for Powergen in the UK, which has strategically important interests in the US market.