E.ON sells German power grid to TenneT for $1.65 billion
11 Nov 2009
Germany's largest utility company E.ON AG has agreed to sell its extra high-voltage power transmission network to state-owned Dutch grid operator TenneT BV for approximately €1.1 billion ($1.65 billion), moving a step forward in creating an integrated power transmission network in Europe.
Under the terms, Tennet will acquire all the shares in the E.ON subsidiary Transpower Stromübertragungs GmbH (Transpower), which owns and operates E.ON's extra high-voltage transmission network, a press release said.
Transpower was formed in 2009 by transferring E.ON's extra-high voltage transmission network of 220/330kV with a total length of about 11,000km, 115 sub-stations and 650 employees.
The agreed enterprise value of Transpower is €885 million and the purchase price as of 31 December has been provisionally set at €1.1 billion, which will be finally determined on the basis of the net financial position at that time.
Analysts value E.ON's high-voltage grid between €1.5 billion to €1.75 billion, higher than the tentative purchase price agreed.
E.ON CEO Wulf Bernotat said: ''We are convinced that TenneT will ensure necessary high investments needed in network expansion including ambitious task of connecting offshore windfarms.''
