RWE says hopes to revive talks with local utilities

FRANKFURT, May 16 (Reuters) - RWE AG (RWEG.DE: Quote, Profile, Research, Stock Buzz), Germany's second-largest utility, said it hoped to revive talks with western German local utilities about jointly selling energy and setting up a European water venture.

The four partners -- the municipal utilities of the city of Dortmund (DEW 21) and Bochum (SWB), water provider Gelsenwasser (WWGG.DE: Quote, Profile, Research, Stock Buzz) and RWE -- agreed to continue the talks, a spokesman for RWE said on Friday.

"From our point of view, there is an agreement to pick up the talks again," he said.

The talks broke down due to difficulties over how to set up a joint group with the three smaller companies and much-larger RWE, the chief executive of Gelsenwasser had said in April.

Citing an RWE manager, German paper Westdeutsche Allgemeine Zeitung (WAZ) reported on Friday that RWE was also interested in combining the water activities from RWE and Gelsenwasser outside the state of North-Rhine Westphalia.

"This new company would have a significant firepower internationally," said Heinz-Werner Ufer, head of RWE's RWE Energy unit, which is responsible for RWE local energy activities, according to WAZ.

RWE, which holds a 47 percent stake in the municipal utility of the city of Dortmund, is seeking to combine its water activities in continental Europe while it is exiting its water businesses in Britain and the United States.

In continental Europe, RWE also has water ventures in Berlin and eastern Germany, as well as in Zagreb and in Belgrade. (Reporting by Peter Dinkloh; Editing by David Holmes)