E.ON to buy 25.1% of Minden-Ravensberg utility for dm260 million

Bloomberg

Katherine Snyder

December 11, 2000

Dusseldorf, Germany, Dec. 11 (Bloomberg) à‚– E.ON AG, Germany’s No. 2 power company, agreed to pay 260 million deutsche marks ($117 million) for 25.1 percent of Elektrizitaetswerk Minden- Ravensberg, one of the country’s 900 utilities.

E.ON, seeking to expand power distribution pacts with municipal and regional utilities outside its dominant supply area, said it will cooperate closely in power generation, distribution and waste with EMR, which has 285,000 customers.

The purchase marks an “important step in creating a regional energy group” in Ostwestfalen-Lippe, where E.ON already has 54.7 percent of PESAG, a company merging with the Paderborn regional utility, E.ON Energie said in a faxed statement.

Created through Veba AG’s $12 billion purchase of Viag AG, E.ON is now looking to cement its foothold at home and fend off foreign rivals by snapping up stakes and raising existing holdings in Germany’s some 900 municipal and regional utilities.

E.ON Chief Executive Ulrich Hartmann last week said the company will try and “turn existing minority shareholdings into majority stakes that can be consolidated” and plans to “participate in asset privatizations in regions where it doesn’t have “an established presence,” he said.

The Dusseldorf-based company is also bidding for the Bielefeld municipal utility, taking on rival Essent NV, which wants to buy a stake in Bielefeld for about 900 million deutsche marks ($409 million) through the Bremen utility it controls, Frankfurter Allgemeine Zeitung reported last week.

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