E.ON in talks to buy stake in Turkish firm from Verbund
ISTANBUL (Reuters) - Germany's biggest power company E.ON (EONGn.DE) is in talks to expand in Turkey by buying a stake in energy firm Enerjisa from Austria's Verbund (VERB.VI), four sources close to the deal told Reuters on Friday.
A deal involving E.ON Ruhrgas EONR.UL could be announced by mid-September, some sources said. Verbund and E.ON Ruhrgas declined to comment.
Enerjisa officials could not immediately be reached for comment. Verbund co-owns Enerjisa with Sabanci Holding (SAHOL.IS).
"Verbund cannot meet Sabanci's aims to grow in energy. Verbund is taking very cautious steps because of problems in the euro zone. E.ON has wanted to enter Turkey for a long time," said one source with knowledge of the talks.
Enerjisa said last year it had dropped a plan to buy a power distribution network in Istanbul (Ayedas) after Verbund backed away from the investment.
Another source said that talks continue and the new partnership will be announced in one to two months, adding that it would be a strategic partnership.
"There have been talks between E.ON and Verbund about an asset swap. E.ON could give up assets in hydro power stations to Verbund. It could be hydro power stations along the river Inn," said a different source.
"In return E.ON would then get assets from Verbund in Turkey. E.ON is looking for joint ventures in Turkey. It could be a minority stake," he said.
"If there aren't any major obstacles, after the (Ramadan) Eid al-Fitr holiday, they will make the first official announcement," said a third source.
Verbund said last month it expects a bigger drop in earnings this year than analysts had anticipated, and warned it might miss its targets if the European economy deteriorates further.
E.ON posted a rise in first-half profit helped by cheaper gas supplies and plans to expand overseas to help offset ongoing economic problems in Europe, with Turkey one of its main targets.
It aims to generate a quarter of adjusted EBITDA from outside Europe, a level it expects to attain at some point after 2015.
Enerjisa has a generation capacity of around 1,650 MW and aims to grow to at least 5,000 MW or a minimum 10 percent market share by 2015.
Talks between E.ON and Turkey's Dogus Holding regarding co-operation in energy sector failed to yield an agreement, sources told Reuters in June.
(Additional reporting by Ozge Ozbilgin in Ankara, Seda Sezer in Istanbul, Tom Kaeckenhoff in Dusseldorf, Christoph Steitz in Frankfurt, Michael Shields in Vienna, Writing by Seda Sezer; editing by Jane Baird and Jason Neely)
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