* Evonik says agrees to sell 51 pct to 7 local utilities
* Plans to sell remaining 49 pct stake to group
* Evonik to get 650 mln eur for 51 pct stake - sources
(Adds details, background)
By Peter Dinkloh and Matthias Inverardi
FRANKFURT, Dec 13 German conglomerate Evonik
[EVON.UL] has agreed to sell a controlling stake in its power
plants to seven municipal utilities from western Germany,
marking the emergence of a new player on German power market.
The chemicals-to-real estate group will get 650 million
euros ($857.5 million) excluding debt for the 51 percent stake
in Germany's fifth-largest electricity producer Steag, three
people with knowledge of the matter told Reuters on Monday.
"The year went well for Steag, the coffers are full, it's
well worth the money," one of the people said.
The people declined to be identified as these details are
The local utilities are from the Rhein-Ruhr area, Germany's
industrial heartland and include suppliers to the cities of
Dortmund, Duisburg and Essen.
The deal will create a new player on the German power
market, something politicians and regulators have pushed for to
reduce the influence of E.ON (EONGn.DE), RWE (RWEG.DE), Energie
Baden-Wuerttemberg (EBKG.DE) and the German unit of Vattenfall
These four power producers control some 80 percent of the
German power market, according to the German cartel office, the
country's antitrust agency.
Evonik's power production division currently sells most of
its power to RWE, but these contracts successively will come up
for renegotiation in coming years, enabling the local utilities
to compete with the large players for customers.
Steag has nine power plants in Germany with a capacity of
7,700 megawatt (MW) and one each in Turkey, Colombia and the
Philippines. This compares with the 23,000 megawatt generation
capacity of E.ON, the world's largest utility, in Germany at the
end of last year.
The municipal utilities have beaten their last remaining
rival bidder in the process, Czech utility operator Energeticky
a Prumyslovy Holding (EPH), several people with knowledge of the
Evonik's power plant division generated sales of 2.6 billion
euros in 2009 and earnings before interest, taxes, depreciation
and amortization of 418 million euros.
The divestment is part of plans by the owner of Evonik, the
RAG Foundation, to raise money for coal mining liabilities in
the area, for which the Foundation is responsible, backed by the
state and federal government.
(Reporting by Peter Dinkloh and Ludwig Burger in Frankfurt,
Matthias Inverardi in Duesseldorf; Writing by Peter Dinkloh;
Editing by Maria Sheahan and Jane Merriman)