German utility E.ON sells its 62.8% stake in Westfalen unit for €360m

German utility E.ON SE (ETR:EOAN) said today it had signed a deal to sell its 62.8% stake in regional unit E.ON Westfalen Weser AG to a consortium of municipal co-owners for some EUR360m (USD470.6m).

Under the terms of the deal, E.ON will buy back retail subsidiary E.ON WestfalenWeser Vertrieb GmbH and certain other shareholdings held by Westfalen Weser, it noted.

The disposal serves the company’s plan, unveiled in the middle of last year, to reorganise its regional utility operations in the country and focus on four regional utilities, namely, E.ON Avacon AG, E.ON Bayern AG, E.ON edis AG and E.ON Hanse AG.

The transaction is expected to be completed soon.

The target, which is based in Paderborn operates about 31,500 km (19,570 miles) of power lines and some 4,000 km of gas pipelines, as well as supplies drinking water and district heating. It has a staff of some 1,000.

Reuters earlier reported that E.ON was nearing a deal to sell its Westfalen Weser stake. It cited two members of the buying group of German municipalities, namely the German cities of Paderborn and Herford, which hold interests in the target.