E.ON sells stake in Mitte unit for $839 million
FRANKFURT (Reuters) - E.ON (EONGn.DE) agreed on Tuesday to sell the grid activities of regional unit E.ON Mitte AG for 610 million euros ($839 million) to a group of municipal shareholders, bringing the German utility closer to completing a 20-billion-euro disposal program.
A deal on E.ON Mitte was expected by the end of the year and the company said it expected the sale to conclude shortly.
Employing about 1,300 staff, E.ON Mitte operates about 45,000 kilometers (km) of power lines and roughly 4,800 km of gas pipelines in large sections of Hesse and other German states including Thuringia and Lower Saxony.
"We're pleased to be leaving E.ON Mitte's modern, reliable power and gas networks in good hands," Ingo Luge, who oversees E.ON's German business, said in a statement.
E.ON, Germany's largest utility, plans to keep the unit's energy distribution activities.
E.ON agreed earlier this year to sell stakes in regional units Thueringer Energie and Westfalen Weser to municipal shareholders as it moves to focus its German business on four units: Avacon, Bayernwerk, E.DIS and E.ON Hanse.
E.ON, along with peers RWE (RWEG.DE), (EBKG.DE) and Vattenfall VATN.UL, have been suffering from a mix of low wholesale power prices, tepid demand for energy in Europe and a boom in renewable energy capacity in Germany, forcing them to shed assets to raise cash.
With the sale of Mitte, E.ON has realized more than 19 billion euros of asset sales, leaving only its 16.67 stake in uranium enrichment firm Urenco on its official divestment list.
Sources told Reuters last month that E.ON had also started preparations for the sale of its Italian business and would soon begin the search for a buyer.
($1 = 0.7271 euros)
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