Vattenfall Gets Green Light To Buy Nuon Energy For $14.5 Billion

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Researched by Industrial Info Resources (Sugar Land, Texas)--The European Commission has cleared the way for Swedish utility Vattenfall AB (Stockholm) to buy the production and supply business of Dutch utility N.V. Nuon Energy (Amsterdam, Netherlands) in a deal worth 10.3 billion euros ($14.5 billion).

Permission has been granted on the condition that Vattenfall sells off Nuon's German electricity retail business, Nuon Deutschland GmbH. The proposed takeover had been stalled because European Commission anti-trust concerns regarding the supply of electricity to small commercial and domestic customers in Berlin and Hamburg. The Commission felt that a combined Vattenfall and Nuon operation would have controlled too large a segment of those markets.

Competition Commissioner Neelie Kroes said, "I am satisfied that the commitments given are sufficient to ensure that after the proposed takeover, fledgling competition could continue to develop further in the German retail electricity market."

The deal, according to Vattenfall, will make it the largest player in the European offshore wind market and help the company pursue its goal of generating 15 terawatt-hours (TWh) of wind power by 2015. This compares to 2.5 TWh in 2009. For additional information, see related news item from March 2, 2009 - Vattenfall and Nuon to Form Energy Company in Europe.

Vattenfall, Sweden's largest utility, is largely owned by the Swedish state, while Nuon is the second-largest energy utility in the Netherlands. Nuon employs more than 10,000 people and, alongside traditional coal- and gas-fired plants, Nuon generates 22.5% of the Netherlands' total wind power and operates the country's first offshore wind farm, Egmond aan Zee, which has a capacity of 108 megawatts. The takeover is Vattenfall's largest to date and will see the company take an initial 49% stake in Nuon, with the rest of the shares allocated over a period of six years.

"The clearance is an important condition for completing the acquisition of Nuon that was announced on 23 February this year," Vattenfall said in statement. "A majority of Nuon shareholders decided at the extraordinary shareholders' meeting of 17 June to accept Vattenfall's offer to acquire the shares of Nuon. The transaction is expected to close on 1 July 2009."

The news comes as German utility RWE AG (OTC:RWEOY) (Essen, Germany) has received permission from the European Commission to forge ahead with its 8.2 billion euro ($11.4 billion) takeover of the production and supply operations of the Netherland's largest utility, Essent NV (Arnhem). Again, conditions were attached that will require Essent to sell its 51% stake in German utility Stadtwerke Bremen AG. For additional information, see related news item from January 15, 2009 - RWE Set to Expand in Netherlands and Belgium with Essent Merger.

A proposed 24 billion euro ($33.7 billion ) merger between Essent and Nuon fell apart in 2007, and since then, both companies have been looking for new buyers.

IIR's Renewable Energy Database provides extensive coverage on the Wind Energy, Geothermal, Hydroelectric, Landfill Gas-to-Energy and Utility-Scale Solar power plants throughout North America, and now expanding coverage across the world.

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