December 12, 2000
ESSEN, Germany, Dec. 12 (Bloomberg) RWE AG, Germany’s largest electricity company, agreed to pay 182 million euros ($160 million) for stakes in Powergen Plc’s Portuguese power plants, extending its reach to Southern Europe.
RWE bought Powergen’s stake in the power plant Tapada do Outeiro, raising its holding in the operating company Turbogas to 75 percent from 25 percent and acquiring Powergen’s 75 percent stake in Portugen, the company that maintains the power plant.
“Electricity demand in Spain and Portugal is defined by high growth rates,” said RWE management board member Gert Maichel in a faxed statement. The move “is a further step toward implementing our international expansion strategy.”
RWE, which earlier this year acquired Thames Water Plc for $9.8 billion, is trying to expand its water, waste and power activities across Europe. The company has more than 15 billion euros to spend on acquisitions, analysts estimate.
Powergen is selling assets to cut debt following its $5.4 billion purchase of LG&E Corp. of the U.S., which was completed today. The Portuguese asset sale means it will surpass a disposal target of 1 billion pounds ($1.5 billion) raised from divestments.
The U.K. company is in talks to sell a power plant to ScottishPower Plc for about 200 million pounds, people familiar with the situation said last month.
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