E.ON Energie, the merged Viag-Veba of Germany, has launched as the largest investor-owned European energy company since gaining regulatory approval. However, its position is to be shortlived after RWE Energie and VEW also gained the expected regulatory clearance for their merger.
The German Cartel Office announced that it would approve the merger after concerns had been resolved. When complete, RWE will again take its position as the largest private European electricity company.
However, RWE has announced a 15 per cent fall in profits in the last year as a result of pricing pressure within the wholesale energy market. The company issued a preliminary statement of profits at a2.71 billion ($2.59 billion) and expects results for the coming financial year to be similarly affected. Operating profits for this year are at best flat, according to the Financial Times, as contracts are to be renegotiated. Furthermore, E.ON may have a surprise up its sleeve with a potential alliance with Austrian oil and gas group OMV, although this may trigger EU anti-trust investigations.
•Changes to the German tax laws could favour gas-fired power stations, if approved by the EU. The government wants to exempt gas-fired plants from a pf32/kWh tax (¢15/kWh) if constructed before 2003. The move is aimed at compensating for the impending nuclear withdrawal.
