GdF and Suez agree merger terms
Suez and Gaz de France have agreed the terms of a merger that will create a power group with an estimated value of €80bn ($114bn) and which will be the fourth largest in the world behind Gazprom, EdF and E.ON. France’s government originally announced the deal in 2006 to counter the potential for a hostile foreign takeover bid for Suez.
Under the agreement, 65 per cent of Suez’s water and waste division will be spun off, while the company’s energy business will be merged with state-owned GdF in a share swap of roughly one for one. The French state will thus have a 35 per cent share of a new energy business that will play the leading role in the world’s liquefied natural gas market and a main part in France’s gas market.
After the merger, France will have two of the world’s five largest energy companies.
GdF will now be linked to Suez’s subsidiary Electrabel of Belgium, a producer of nuclear power. The joint company shall be known as GdF-Suez.
Russia’s electricity monopoly sells majority stake in utility to E.ON
Russia’s electricity monopoly UES has sold a majority stake in its power utility OGK-4 to Germany’s E.ON as part of a bid to raise funds to modernize the country’s aging power generation infrastructure.
In what will be the biggest foreign investment in Russia’s power sector, E.ON will spend €4.1bn ($5.8bn) to increase its share of OGK-4 to 70 per cent. In an earlier move it had made the highest bid for 41 per cent of OGK-4 against the only other bidder, Finland’s Fortum.
The new deal is E.ON’s first large investment in Russia’s electricity sector. Chief executive Wulf Bernotat called the purchase “another important step into the Russian electricity market, which offers enormous growth potential due to the sharp increase in industrial demand”.
UES is spinning off 20 wholesale and regional electricity generation groups in an effort to generate $100 bn to fund improvements to its aging infrastructure, for which it needs foreign technology and know-how.
Holland’s biggest energy firms call off €24bn merger
Holland’s two largest energy companies have scrapped their proposed €24bn ($34.1bn) merger after failing to agree to the terms of the union.
Essent NV and Nuon NV had in February said the move was vital to allow them to compete with European rivals. The plan was that to Essent would have a 55 per cent and Nuon a 45 per cent stake in the merged company. But the firms recently stated: “No agreement could be reached over the manner in which underlying corporate data would be verified, and the exchange ratio was dependent on that.”
Hungarian oil refiner and Czech utility plan gas fired cogeneration business
Hungary’s oil refiner MOL and Czech utility CEZ have signed a memorandum of understanding to create a joint gas fired combined heat and power (CHP) business to let the former control its costs and the latter to expand into new markets.
The new business will operate in central and south-eastern Europe in countries in which MOL’s refineries make it a major energy consumer and into which CEZ aims to extend its presence.
As a first step, the joint venture is expected to build and operate CHP plants fired by gas and refinery residuals in Bratislava in Slovakia and Szazhalombatta in Hungary.
CEZ will also acquire a 10 per cent stake in MOL in the near future. The Czech utility says that it plans to enter Poland’s heat distribution market.
French trio form business to store CO2 geologically
French organizations have pooled their skills to form a company to supply engineering services for the transport and geological storage of CO2.
Geogreen is a joint venture between research and training centre IFP, engineering group Géostock and earth-sciences public institution BRGM, whose respective stakes in the company are 40 per cent, 40 per cent and 20 per cent.
Geogreen says it can provide a broad range of services, including upstream expertise and engineering and project development. Its long-term plan includes offering inspection and maintenance services for injection sites.
Enel to control Russian generator
Italy’s Enel has won permission to take full control of a Russian generating company. Russia’s anti-trust agency says it has given the energy firm the right to raise from 30 to 70 per cent its stake in OGK-5, which has four thermal plants with a total output of about 9 GW.
The acquisition will be another addition to Enel’s recent expansion, after its joint bid with Spain’s construction and energy group Acciona for €43bn ($61bn) to control Endesa of Spain was approved.
Enel has also recently acquired 49 per cent of Rusenergosbyt, which is Russia’s largest independent electricity distributor.
Germany: Turbo gear unit maker BHS Getriebe has joined the turbo division of the Voith group and has changed its name to Voith Turbo BHS Getriebe GmbH.
India: Engineering firm Span Consultants Pvt of New Delhi has been acquired by infrastructure owner SNC-Lavalin. SNC-Lavalin aims to develop operations in India from permanent bases there.
India: Kalyani group has acquired Germany’s wind energy consulting company RSBconsult as part of a plan to enter the wind energy sector. Kalyani said it will provide a global supply chain while RSB will provide design and engineering.
Italy: Enel says its acquisition phase is over and that it has no plans to buy any assets of Gaz de France that will become available following that company’s merger with Suez.
Spain: Energy company Iberdrola is to float its wind power business Iberenova, the world’s largest, to fund developments. The flotation will generate up to €4bn ($5.7bn). Iberenova owns wind capacity of 6.5 GW and has 37.7 GW pending.
UK: Generator Infinis is buying the renewable portfolio and fuel contract business of Scottish Biopower. This includes five biomass projects of total capacity 125 MW and five wind farms totalling 125 MW.
UK: Household energy retailer Scottish and Southern Energy has raised its stake in renewable energy project deliverer Solarcentury Holdings to 12.3 per cent through the investment of £1.1m ($2.2m) in the company.
UK: Russian gas company Gazprom plans to join Germany’s E.ON in buying a stake in GE Energy’s gas fired power plant Baglan Bay. Gazprom and E.ON are also planning asset-swap deals to add to those that are on going.
USA: Capstone Turbine Corporation and renewable energy solution provider UTC Power are extending their joint development of a low-emission 200 kW microturbine that will provide heating, power and cooling.
USA: Gas and electricity group KeySpan has been sold to the UK’s National Grid in what is the latter’s biggest US acquisition to date. The $7.3bn deal makes National Grid the USA’s second largest utility.