RWE Energy Acquires ExxonMobil's Local and District Heating Business in Germany

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Researched by Industrial Info Resources (Sugar Land, Texas)--RWE Energy AG (Dortmund, Germany), a part of the RWE Group (OTC:RWEOY) (Essen, Germany), Europe's second largest utility, recently entered into an agreement with ExxonMobil Central Europe Holding GmbH (Hamburg, Germany) to acquire Favorit Unternehmens Verwaltungs GmbH, the firm's local and district heating business units in Germany. According to the agreement, RWE Energy will acquire a 100% stake in Favorit from ESSO Deutschland GmBH (Hamburg, Germany), a German subsidiary of ExxonMobil (NYSE:XOM) (Irving, Texas). The transaction is subject to approval from the Federal Cartel Office.

Favorit, which operates ExxonMobil's local and district heating segment in Germany, supplied 1,000 gigawatt-hours of heat to 70,000 customers and generated revenues of $106 million in 2007. The firm focuses on local and district heating in the German states of Baden-Wuerttemberg, Hamburg, Hessen and North Rhine-Westphalia.

The acquisition is part of RWE Energy's strategy to strengthen its presence in the local and district heating sector and to expand its energy generation and energy services. In another development, the firm announced that it would hold 19.8% of the shares in Cegedel, a new national electricity and gas company that is being established by the Grand Duchy of Luxembourg.

RWE Energy handles the sales and grid business segments of the RWE Group in continental Europe. The firm provides electricity, gas and water to a range of customers, including residential households, commercial venues, industrial facilities and regional and municipal utilities. The firm, along with its affiliates and subsidiaries, provides electricity to 15.5 million customers and gas to 7.6 million customers in continental Europe.

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