E.ON plans to sell Spanish business: sources

FRANKFURT Fri Dec 20, 2013 4:39am EST

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FRANKFURT (Reuters) - E.ON (EONGn.DE), Germany's biggest utility, is planning to divest its operations in Spain, two people familiar with the matter told Reuters on Friday, as the energy group pulls out of recession-hit markets in southern Europe.

E.ON owns about 4.3 gigawatt (GW) of capacity in the country, about 3.2 GW of which is conventional power such as coal and gas plants, while the remaining 1.1 GW comprises renewable assets.

It has 688,000 customers in Spain and employs 1,200 there, less than 2 percent of its total workforce.

"We are continuously reviewing the strategic options for optimizing our entire portfolio across our group. We will not comment further on any country-specific option or activity," a spokeswoman for E.ON said.

The plans to sell the Spanish business, earlier reported by German magazine Der Spiegel, come weeks after sources said E.ON was considering exiting the Italian market, where it owns 6 GW, in a deal that could fetch about 3 billion euros ($4.1 billion).

Hit by low wholesale power prices, weak demand for energy in Europe and a boom in renewable energy capacity in Germany, German utilities, including E.ON, RWE (RWEG.DE) and EnBW (EBKG.DE), have been forced to shore up their balance sheets by shedding billions of euros worth of assets.

E.ON earlier this week said it had agreed to sell the grid activities of regional unit E.ON Mitte AG for 610 million euros, bringing its total asset sales to more than 19 billion euros.

Its shares were little changed, up 0.1 percent at 13.21 euros. ($1 = 0.7316 euros)

(Reporting by Christoph Steitz and Arno Schuetze; Editing by Harro ten Wolde and David Holmes)

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