Essent to be sold to German power giant RWE
The Dutch power company has agreed to be sold for EUR 9.3 billion.FRANKFURT – The second biggest German power company, RWE, said Monday it had agreed a 9.3-billion-euro takeover of Dutch peer Essent in the biggest European takeover this year.
The deal makes RWE a major energy supplier across much of western Europe and should protect the German company from becoming a takeover target in turn.
The two groups "have today reached agreement on the terms and conditions for a binding all-cash offer by RWE to the shareholders of Essent for the acquisition of all of the issued and outstanding shares in Essent," the RWE statement said.
Essent's distribution networks and waste management operations were not included in the deal.
RWE has also been interested in expanding outside its core markets of Germany and Britain, and the deal makes it "one of the leading energy providers in the Benelux" region of Belgium, Netherlands and Luxembourg, the statement said.
The deal is subject to RWE being able to secure at least 80 percent of Essent's issued and outstanding share capital and would be finalised following approval from relevant competition authorities, it added.
The German group had earlier sought to buy British Energy, which was snapped up by French rival EDF, and the Russian company TGK-2, a deal that collapsed when the two sides were unable to agree on a price.
RWE finally became the object of takeover rumours, with EDF said to be among those interested.
With Essent, RWE will vary its sources of production and improve its average level of carbon dioxide emissions, a topic which is gaining in importance in Europe.
While RWE has focused until now on producing electricity with nuclear energy and coal, Essent has also developed renewable energy sources such as wind parks, along with biomass, hydraulic and solar sources.
The deal "will complement RWE's own efforts to increase its renewables capacity to 4,500 MW (megawatts) by 2012," the statement said.
RWE shares nonetheless fell by 1.52 percent to EUR 62.17 following the announcement, while the DAX index of leading German shares was off by 0.31 percent overall.
[AFP / Expatica]