E.ON sells majority of waste-burning unit
FRANKFURT (Reuters) - German utility E.ON is to sell a majority stake in its waste-burning unit to private equity firm EQT, disposing of a non-core assets to cut debt.
E.ON said on Wednesday it would sell its Energy from Waste unit to a newly formed joint venture with EQT Infrastructure II, a fund belonging to EQT, the private equity firm backed by Sweden's Wallenberg family.
E.ON, Germany's largest utility, will hold 49 percent in the joint venture, while EQT Infrastructure II will own the remainder.
"Together with our partner, we want to guide E.ON Energy from Waste to a successful future as an independent company," E.ON Chief Executive Johannes Teyssen said.
No financial details were disclosed.
In June, E.ON halted the sale of Energy from Waste after receiving bids that it said were too low.
The transaction with EQT, which requires antitrust approval, is expected to close in the first quarter of 2013, E.ON said.
With the deal, E.ON said it will have achieved more than 14 billion euros ($18.5 billion) of its target to generate 15 billion euros through asset sales by the end of 2013.
E.ON Energy from Waste generated revenue of 544 million euros in 2011. It has 18 waste incinerators in Europe, most in Germany, with an annual capacity of 4.8 million metric tons.
The market faces overcapacity after Germany encouraged the construction of incinerators in the 1990s to reduce the use of landfills.
These plants now compete for shrinking amounts of waste as recycling increases. Incineration companies must pay more for the refuse they use as fuel while power prices are falling.
In Germany less than 1 percent of electricity comes from waste. ($1 = 0.7568 euros)
(Reporting by Christoph Steitz and Arno Schuetze; Editing by David Cowell)