E.on Energie AG, which has had a small holding in the Swedish company Sydkraft for some years, has recently enlarged its holding to 29.4 per cent of the shares and 42.8 per cent of the voting stock, an acquisition that cost the company 272 million euros. According to Swedish law E.on must now make a public offer to buy out the remaining shareholders, and the company has announced it will do this by early March.
E.on is also taking an interest in PowerGen, a company reputedly in need of capital, which E.on has plenty of following the sale of it telecommunications division VIAG-Interkom. Certainly E.on, formed by the merger of Veba and Viag, is placing itself to continue acquiring utilities following the breakdown of its merger talks with Suez Lyonnaise des Eaux and failure to identify a replacement European partner of suitable size. The company has already announced that it expects a sharp rise in operating profits during 2001 and that it plans a number of acquisitions in coming years; it has declared its intention of taking over Czech generating companies Jihoceska Energitica and Jihomoravska Energetika and is thought to be investigating possibilities arising from Polish privatisation.
German multi-utility RWE is currently engaged in trying to takeover Hidroelectrica del Cantabrico, Spain’s fourth largest utility. It is offering 26 euros per share. Meanwhile the Spanish government has agreed to the merger of Endesa SA and Iberdrola SA, the combination becoming one of the world’s five largest utilities. One of the conditions is that 1800 MWe of power plant must be sold off, and RWE would be interested in buying it; but everything is on hold at present. One of the Iberdrola shareholders, the Spanish bank Bilbao Bizkaia Kutxa, is opposing the sell-off condition, laid down by the government, which is effectively halting the process.
