3 May 2002 – Austria’s second largest utility is up in arms about the decision of the Slovak privatization steering committee to award the sale of a 49 per cent stake in ZSE electric utility to Germany’s E.ON, despite a higher bid from EVN.
Zapadoslovenske Energeticke Zavody (ZSE) is Slovakia’s biggest electric utility whose operations border Austria. EVN is understood to have bid €351m ($318m) for the stake and management control in the utility but the committee has recommended the acceptance of E.ON’s offer of $330m on the basis that they represented a better strategic partner.
The decision has angered Rudolf Gruber, EVN chief executive, who viewed the acquisition of the Slovak utility as important step in his attempt to unite Austria’s fiercely independent utilities and form a regional player that could compete with the giants.
EVN’s bid for a stake in ZSE was the second step in its strategy to form a large central European regional electric utility. Although EVN is far more profitable and financially stronger than ZSE, the two companies sell roughly the same amount of electricity, and EVN argues that the close proximity of the two networks offers obvious operational synergies.
Mr Gruber has written to Maria Machova, Slovakia’s minister of privatisation, outlining his concerns that EVN’s bid was dismissed because EVN was “too small”.