DGAP-News: E.ON AG / Key word(s): Disposal
E.ON AG: E.ON sells UK power distribution business to PPL Corporation
02.03.2011 / 02:00
---------------------------------------------------------------------
E.ON sells UK power distribution business to PPL Corporation
- Agreed purchase price of £4 billion GBP (EUR4.7 billion*) represents
excellent value for E.ON
- Disposal is key contribution towards EUR15 billon divestment target
- New owner committed to long-term future of Central Networks
E.ON has agreed to sell its UK electricity power distribution business,
Central Networks, to PPL Corporation, Allentown, Pennsylvania (PPL) for £4
billion GBP. In PPL, E.ON has found an experienced and professional partner
which is committed to the long-term future of Central Networks.
E.ON AG's supervisory board approved the deal which is expected to close in
early April. The purchase price of £4 billion GBP for 100% of the
enterprise value includes an assumption of £500 million of existing debt.
Central Networks is the UK's second largest electricity distributor and
operates the regional grid that covers the UK's Midlands. Through its
network of 133,000 km of overhead and underground cables, the business
delivers power to over five million customers.
E.ON CEO, Johannes Teyssen said: 'Central Networks is a consistently high
performing distribution business. However after nine years of full
ownership, the business offers E.ON limited value enhancement opportunities
and, due to the strict regulation, there is no possibility to leverage
synergies with other E.ON businesses in the UK. The purchase price
represents excellent value for E.ON and the proceeds will be a key
contribution towards our EUR15 billion divestment target by the end of
2013. The proceeds of the sale will increase E.ON's financial flexibility
and strengthen our balance sheet.'
E.ON UK, CEO, Paul Golby commented: 'PPL is an excellent partner for
Central Networks. They share our goal of providing a safe and reliable
service for our customers and our communities. I want to take this
opportunity to thank everyone at Central Networks for the excellent work
they have done as part of E.ON and as we look to finalize the transaction,
we will work closely with PPL, our trades unions and representatives to set
a successful course for the future of the combined company and its
employees.'
E.ON purchased Central Networks East as part of its takeover of UK based
Powergen in 2002. In 2004, E.ON purchased Midlands Electricity for £1.2
billion GBP (EUR 1.6 billion**). After a successful integration, the
business was re-branded Central Networks and continues to provide a
reliable electricity supply to millions of customers today. At the start of
this year, the UK regulator, OFGEM, allowed E.ON to invest £2.3billion in
its networks in the five years from 2010 to help improve the network and
service. The investment is part of the regulator's Distribution Price
Control Review 5.
Last year, E.ON AG sold its E.ON U.S. Midwest business to PPL Corporation
for 7.6 billion US-Dollars (EUR5.7 billion **). The transaction was closed
in November 2010.
*EUR/£ assumed at 1.17
**exchange rate at time of transaction
--------------------------------------------------
This press release may contain forward-looking statements based on current
assumptions and forecasts made by E.ON Group management and other
information currently available to E.ON. Various known and unknown risks,
uncertainties and other factors could lead to material differences between
the actual future results, financial situation, development or performance
of the company and the estimates given here. E.ON AG does not intend, and
does not assume any liability whatsoever, to update these forward-looking
statements or to conform them to future events or developments.
End of Corporate News
---------------------------------------------------------------------
02.03.2011 Dissemination of a Corporate News, transmitted by DGAP - a
company of EquityStory AG.
The issuer is solely responsible for the content of this announcement.
DGAP's Distribution Services include Regulatory Announcements,
Financial/Corporate News and Press Releases.
Media archive at www.dgap-medientreff.de and www.dgap.de
---------------------------------------------------------------------
Language: English
Company: E.ON AG
E.ON-Platz 1
40479 Düsseldorf
Deutschland
Phone: +49 (0)211 4579-0
Fax: +49 (0)211 45 79-5 01
E-mail: investorrelations@eon.com
Internet: www.eon.com
ISIN: DE000ENAG999
WKN: ENAG99
Listed: Regulierter Markt in Berlin, Düsseldorf, Frankfurt (Prime
Standard), Hamburg, Hannover, München, Stuttgart;
Terminbörse EUREX; Mailand
End of News DGAP News-Service
---------------------------------------------------------------------
114089 02.03.2011
DGAP-News: E.ON AG: E.ON sells UK power distribution business to PPL Corporation
| Source: EQS Group AG