E.ON Sells Italian Power Plants

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Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland)--German energy giant, E.ON AG (OTC:EONGY) (Dusseldorf, Germany), has announced the proposed sale of its coal and gas-fired power plants in Italy to Czech energy company, EPH (Prague).

The private energy company will take control of plants with a combined generating capacity of around 4,500-megawatts (MW) for an undisclosed sum, but that analysts estimate to be worth €500 million to €600 million ($588 million to $705 million). They consist of the 600-MW Fiume Santo coal-fired power plant in Sardinia and approximately 3,900 MW of gas-fired power capacity across six power plants located on the Italian mainland and in Sicily.

The transaction is subject to the approval of the European Union (EU) competition authority but is expected to close in the second quarter of 2015.

"Our conventional generation activities in Italy are high performing assets with a climate-friendly and diversified generation fleet," explained E.ON CEO, Johannes Teyssen. "They are a key element of energy security in Italy and I am convinced that the new owner will continue to invest into the energy system of the country. I want to take this opportunity to thank all affected employees in Italy for the excellent work they have done as part of E.ON. We will work closely with the new owner, our trade unions and their representatives to set a successful course for the future of the assets and our employees. We continue to assess a possible divestment of our other businesses in Italy as well."

Daniel Křetínský, CEO of EPH commented: "We are proud to have the opportunity to continue E.ON's tradition in the conventional power generation in Italy. Our strategy is long term and development focused. We look forward working on this goal together with employees, trade unions and other stakeholders."

EPH is a vertically integrated energy group operating mainly in the Czech Republic, Slovakia, Germany and Poland. EPH is a dominant player in the Slovak gas and electricity distribution industry, a key transporter of Russian natural gas to the E.U. the third largest coal mining company in Germany and second largest power distributor in Slovakia. The company has been on a shopping spree in recent years and is believed to be interested in acquiring Vattenfall's German mining portfolio.

Last month, E.ON announced plans to split its company into two in order to capitalize on the rise of renewable energy. The main business will now focus on renewables, distribution networks, and customer solutions. A new independent company, made up of its conventional generation, global energy trading, and exploration and production businesses, will be set up in 2016. For additional information, see December 3, 2014, article - E.ON Goes Green, Splits Company in Two.

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