UPDATE 2-Verbund swaps Enerjisa stake for E.ON hydro plants

Mon Dec 3, 2012 5:01pm EST

Related Topics

* E.ON to acquire Verbund's 50 pct stake in Enerjisa
    * Verbund to acquire E.ON interest in 8 German hydro plants
    * Each side of transaction worth more than 1 bln eur

 (Adds details, background)
    VIENNA/FRANKFURT, Dec 3 (Reuters) - Germany's biggest energy
group E.ON pushed ahead with its foreign expansion on
Monday, agreeing to take over a stake in Turkish energy firm
Enerjisa form Austrian hydropower company Verbund. 
    Verbund, which is divesting non-core assets, will swap its
50 percent stake in Enerjisa for E.ON's interest in eight
run-of-river plants in Germany plus other assets, Verbund said
in a statement late on Monday.
    Enerjisa's other half is owned by Turkey's Sabanci Holding
.
    "With this transaction, Verbund reinforces its position in
Germany, its most important international market, and in its
core technology hydropower generation," Verbund said.
    A spokeswoman for Verbund said each side of the deal was
worth more than 1 billion euros ($1.3 billion). An E.ON
spokesman confirmed the agreement and said the company would
give more details on Tuesday.
    Sources had told Reuters in November that the deal was
coming and that the whole transaction would be worth more than
$1 billion. 
    Battered by Germany's decision to pull out of nuclear power,
high levels of debt and stagnating energy demand in Europe, E.ON
is desperate to tap fast-growing markets and has said in the
past that Turkey was a target region.
    The company in January had agreed to buy a 10 percent stake
in Brazil's MPX Energia, teaming up with Brazilian
billionaire Eike Batista to build the largest privately held
network of power plants in Brazil. 
    E.ON's still generates a large part of its core earnings in
Europe, which, including Russia, accounted for about 46 percent
of the group's nine-month earnings before interest, tax,
depreciation and amortisation (EBITDA).
    E.ON - whose name bears an intended resemblance to the
ancient Greek word for eternity - has chosen a more selective
and less pricey strategy in its recent foreign expansion.
    Analysts have criticised E.ON's poor track record when it
comes to takeovers, pointing to billions of writedowns it had to
book on overpriced acquisitions in recent years.
    After a failed attempt to buy Spanish peer Endesa 
in 2007, E.ON spent about 10 billion euros on plants and other
activities in Spain, Italy, France, Turkey and Poland owned by
Italy's Enel and Spain's Acciona.
    The deal backfired when Europe's sovereign debt crisis broke
out, dampening demand in southern Europe and forcing E.ON to
book 2.6 billion euros in writedowns in late 2010, and another 3
billion a year later.
    ($1 = 0.7650 euros)

 (Reporting by Georgina Prodhan and Angelika Gruber in Vienna,
Christoph Steitz in Frankfurt and Tom Kaeckenhoff in
Duesseldorf; Editing by Sofina Mirza-Reid and David Gregorio)
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