EC approves EDF Trading
The European Commission has approved the creation of the joint venture – EDF Trading Ltd – by EDF and the French group Louis Dreyfus. The core business will be energy trading.
The two companies have agreed that EDF Trading will not directly or indirectly assist EDF in establishing prices or structuring contracts for eligible customers in France or assume risks associated with such complex offers until the French market is fully open.
The EC said that it welcomed developments of this type which advanced liberalization of the EU’s energy market.
Louis Dreyfus is a company whose main interests are energy and trading in raw materials such as oil, agricultural products and plastics. In the energy sector it has an oil refinery in Germany and various oil and gas activities in the USA.
Allied Signal and MTU form Vericor
The European Commission has approved a joint venture in the small aeroderivative gas turbine sector by AlliedSignal of the USA and German group MTU.
AlliedSignal will contribute its small gas turbine activities to the joint venture – Vericor Power Systems LLC which will be based in the USA. Vericor will develop, market, sell and deliver customer support for small aeroderivative industrial and marine gas turbines produced on the basis of AlliedSignal’s technology.
The joint venture will extend MTU’s product range and AlliedSignal’s geographic reach.
Rolls-Royce in India
Rolls-Royce (R-R) has formed a wholly-owned subsidiary in India to increase its focus on the country’s expanding power generation and oil and gas market.
The company says that the formation of Rolls-Royce Energy Systems India Private Ltd (RRESIPL) is consistent with its strategy of growing its global energy business through a complete range of services, products and after-market support for customers in the power generation, oil and gas sectors.
The new company will undertake a range of activities in its core sectors, including the design, development, commissioning and servicing of systems which use R-R diesel engines and industrial gas turbines.
The announcement follows the acquisition of the rotating equipment interests of Cooper Energy Services based in Mount Vernon, Ohio for $180m.
The company also recently agreed to purchase National Automotive Corporation.
Plug pulled on digital powerline technology
Nortel Networks and United Utilities have pulled the plug on Nor.Web, a joint venture company aimed at exploiting technology enabling electricity cables to carry data and provide high speed internet access.
The companies said that the digital powerline technology had worked well but that market conditions had changed and they could no longer justify their investment. The decision reflects the surge in interest in ADSL, a competing broadband technology that enables high speed access through existing telephone lines.
Powerline technology had been expected to revolutionise data access in the home. It is capable of delivering data at 1Mbit/s, nearly 20 times faster than existing modems.
ABB plans India consolidation
ABB has decided to consolidate its interest in the power business in India under one holding entity. After the consolidation, the interests will be transferred to a joint venture formed by the global merger of the power businesses of ABB and Alstom.
The group’s entire holdings in companies like ABB ABL (formerly ACC Babcock Ltd), routed through different subsidiaries, are being transferred to the new entity. Elsag Bailey Finance & Technology, an ABB group company in the Netherlands, has been identified for consolidation of these ABB interests for eventual transfer to the joint venture.
The power interests in India include the boiler business of ABB ABL and equity in three major power projects.
VA Tech buys Sulzer Hydro
Austria’s biggest engineering company, VA Tech, is to takeover the hydropower business of Sulzer. This will create the world’s second largest maker of hydropower plant equipment.
The purchase of Sulzer Hydro will nearly double the size of VA Tech’s hydro manufacturing operation and give the new group revenues of Euro520m ($556m).
PowerGen eager for US purchase
UK generator PowerGen has said that a US acquisition was a priority. The company is willing to spend up to $5bn within the next 12 months. The company has also said it wants acquire another UK regional electricity distribution business.
PowerGen has identified 30-40 potential targets in the US each valued at between $2bn and $5bn.
The company was involved in merger talks with Reliant (formerly Houston Industries) which collapsed. PowerGen said management control problems made it difficult to merge with a similar sized or larger US group.
Analysts, meanwhile, feared that PowerGen would pay too much in its haste to enter the US market.
ABB Chinese venture: ABB has created a joint venture in China to manufacture power transformers. ABB will own 51 per cent of the new company called ABB Zhongshan Transformer Co. Ltd. Together with its partner Zhongshan Transformer Company, ABB will invest about $30m over the next three years.
Aggreko growth: Genset hire company Aggreko raised interim profits nearly 28 per cent. The growth was powered by robust sales in US and Europe. The company reported a rise in pre-tax profits from £12.9m ($21.3m) to £16.5m on turnover of £94.6m.
British Energy acquisition: UK generator British Energy has been given the go-ahead to acquire the Swalec electricity and gas supply business.
Enel bond offer: State-owned Italian utility, Enel, which will be privatized shortly, raised Euro2.2bn ($2.3bn) in the international bond markets in one of the largest offerings from a European utility. Enel was taking its final opportunity to issue debt as a state-owned company this year, as it prepares for what should be one of the world’s largest initial public offerings.
Kvaerner sells power assets: Kvaerner is to sell most of its thermal power activities, worth about $260m in sales, to GE. A deal with GE would mean the loss of 670 jobs, primarily in the UK where the company’s power projects and service divisions of Kvaerner Energy are located. In August, GE paid $70m to acquire Kvaerner’s hydropower activities.
PowerGen profits up: UK generator PowerGen has built on its strategic position in the first half of 1999. Group turnover for the first six months was £1904m ($3006m), which was £426m higher than the equivalent period for last year. This includes £604m from the East Midlands Electricity business acquired in July 1998. Profits for the same period rose from £311m to £401m.
RWE increases stake: German utility RWE Energie has increased its stake in Czech utility STA from 27.5 to 35 per cent. STA supplies electricity to consumers in the Prague region and central Bohemia. It has a 14 per cent share of the Czech electricity market.
Tractebel profits: Belgian energy group Tractebel announced a 10.3 per cent increase in first half net profits to Euro281.9m ($295m). Suez Lyonnaise has made a bid to buy the 49.7 per cent it does not already own of Tractebel. Suez’s absorption of Tractebel could be followed by a merger of Tractebel with its electricity and gas subsidiaries, Electrabel and Distrigaz – of which it owns 40 and 42 per cent respectively.