UPDATE 1-Evonik sells power plants to local utilities
* Evonik says agrees to sell 51 pct to 7 local utilities
* Plans to sell remaining 49 pct stake to group
* Evonik to get 650 mln eur for 51 pct stake - sources
(Adds details, background)
By Peter Dinkloh and Matthias Inverardi
FRANKFURT, Dec 13 (Reuters) - German conglomerate Evonik [EVON.UL] has agreed to sell a controlling stake in its power plants to seven municipal utilities from western Germany, marking the emergence of a new player on German power market.
The chemicals-to-real estate group will get 650 million euros ($857.5 million) excluding debt for the 51 percent stake in Germany's fifth-largest electricity producer Steag, three people with knowledge of the matter told Reuters on Monday.
"The year went well for Steag, the coffers are full, it's well worth the money," one of the people said.
The people declined to be identified as these details are still confidential.
The local utilities are from the Rhein-Ruhr area, Germany's industrial heartland and include suppliers to the cities of Dortmund, Duisburg and Essen.
The deal will create a new player on the German power market, something politicians and regulators have pushed for to reduce the influence of E.ON (EONGn.DE), RWE (RWEG.DE), Energie Baden-Wuerttemberg (EBKG.DE) and the German unit of Vattenfall [VATN.UL].
These four power producers control some 80 percent of the German power market, according to the German cartel office, the country's antitrust agency.
Evonik's power production division currently sells most of its power to RWE, but these contracts successively will come up for renegotiation in coming years, enabling the local utilities to compete with the large players for customers.
Steag has nine power plants in Germany with a capacity of 7,700 megawatt (MW) and one each in Turkey, Colombia and the Philippines. This compares with the 23,000 megawatt generation capacity of E.ON, the world's largest utility, in Germany at the end of last year.
The municipal utilities have beaten their last remaining rival bidder in the process, Czech utility operator Energeticky a Prumyslovy Holding (EPH), several people with knowledge of the matter said.
Evonik's power plant division generated sales of 2.6 billion euros in 2009 and earnings before interest, taxes, depreciation and amortization of 418 million euros.
The divestment is part of plans by the owner of Evonik, the RAG Foundation, to raise money for coal mining liabilities in the area, for which the Foundation is responsible, backed by the state and federal government.
(Reporting by Peter Dinkloh and Ludwig Burger in Frankfurt, Matthias Inverardi in Duesseldorf; Writing by Peter Dinkloh; Editing by Maria Sheahan and Jane Merriman)
- Exclusive: Malaysia plane probe narrows on mid-air disintegration - source
- Radar showed missing plane may have turned back: Malaysia military
- Missing Malaysian jet may have disintegrated in mid-air: source |
- Malaysian plane presumed crashed; questions over false IDs |
- Merkel raps Putin as Russian forces tighten grip on Crimea |