German power group E.ON was given the go-ahead to proceed with its takeover of UK’s Powergen by the US Federal Energy Regulatory Commission (FERC) yesterday. The deal is due to be completed in Spring 2002 but still requires SEC approval.
Analysts saw the FERC clearance as important if the deal was not to be delayed. Scrutiny by US regulators was due to Powergen’s ownership of Kentucky-based LG&E Energy. State regulators in Kentucky and Virginia have already cleared the proposed deal.
Commenting on this approval Ulrich Hartmann, chairman and chief executive of E.ON AG, said, “FERC is the first US federal regulator to rule on this deal and I am very pleased that they have agreed it should be allowed to proceed. We are continuing to work towards securing the remaining regulatory approvals, in particular from the SEC and from the European Commission. We remain on track to complete the deal.”
Nick Baldwin, Chief Executive of Powergen said, “The deal we have done with E.ON is a good one for our shareholders, our customers in the UK and USA and for our employees in both countries. FERC approval is an important step forward and I am delighted we have now received this.”
E.ON and Powergen announced in April a pre-conditional offer for EON AG to acquire Powergen for a total of à‚£9.6bn ($6.5bn). In order to proceed, the deal requires approval from a number of regulatory authorities in the USA, Great Britain and by the European Commission.