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.

German utility E.ON to acquire Verbund’s stake in Turkish Enerjisa Enerji

German energy group E.ON AG (ETR:EOAN) said today it had sealed a definitive deal to buy Austrian utility Verbund AG’s (WBAG:VER) 50% stake in the Turkish joint venture Enerjisa Enerji Uretim AS.

The transaction is in line with the buyer’s strategy to grow internationally, beyond its European core markets. It follows the company’s entry into Brazil in early 2012 through the purchase of a 10% stake in MPX Energia SA (PINK:MPXEY).

Under the arrangement, E.ON has agreed to transfer to Verbund its stakes in certain hydroelectric stations in Bavaria, which represent 351MW of attributable generating capacity. They include E.ON’s interest in Oesterreichisch-Bayerische Wasserkraft AG (OBK), Donaukraftwerk Jochenstein AG (DKJ), Grenzkraftwerke GmbH as well as Nussdorf, Ering-Frauenstein and Egglfing-Obernberg run-of-river hydroelectric stations on the Inn River in Bavaria, along with procurement rights from Zemm-Ziller Hydroelectric Group.

Following the deal, the German firm will still be a leading hydro operator with some 2,300MW of hydro capacity in Germany, and will have a total of 6,000MW of hydro capacity, it said. E.ON added that it would seek to have at least a 10% slice of the local generation market by 2020, together with the other owner of Enerjisa, Turkish financial and industrial conglomerate Sabanci Holding AS. During a conference call with journalists today, E.ON’s chief financial officer Marcus Schenck also pledged investments of between EUR150m and EUR200m a year in Turkey until 2015.

The deal, which is awaiting approvals by the European Commission, Germany’s and Turkey’s antitrust watchdogs and Turkey’s energy regulator EMRA, is seen to be completed in the first quarter of 2013.

E.ON sells gas grid to a Macquarie-led consortium for €3.2bn

German utility E.ON AG (ETR:EOAN) said it had agreed to sell its gas grid in Germany Open Grid Europe (OGE) to a consortium of Macquarie European Infrastructure Fund 4, Infinity Investments, British Columbia Investment Management Corp and Meag Munich Ergo for around EUR3.2bn (USD4bn).

E.ON said it would use the proceeds from this divestment to cut debt and invest in growth operations.

The group, which aims to raise some EUR15bn from disposals by 2013, said the sale of OGE brought it closer to that target. So far E.ON has sold assets worth over EUR12bn, it said.

OGE, the former gas transmission division of E.ON Ruhrgas AG, has been separated from the parent company in 2010 and established as an independent transmission operator in line with the European Union (EU) norms.

Now the firm operates the largest gas transmission system in Germany, serving as a key centre in Europe for shipments of bulk gas from Russia and Norway.

The Macquarie European Infrastructure Fund 4 of Australian banking group Macquarie Group Ltd (ASX:MQG) headed the buying consortium. Edward Beckley, head of Macquarie Infrastructure and Real Assets in Europe, commented that OGE was a very well run firm in a stable and regulated environment.

According to unnamed sources cited by Bloomberg, the buyers had resorted to nine banks to underwrite loans of over EUR2bn to help finance the deal.

E.ON said it expected to wrap up the sale in the third quarter of this year, pending clearance from the German Federal Cartel Office and the German Federal Ministry of Economics and Technology.