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Out of Southern Europe?

December 20, 2013

Germany's biggest utility company, Eon, has been reported to be moving out of Southern Europe. It's allegedly planning to sell its assets there amid a drive to refocus it efforts on more lucrative markets.

Eon logo on metal sheet
Image: picture-alliance/dpa

German electricity conglomerate Eon was planning to sell its asset stakes in Italy and Spain, an unconfirmed report by the new magazine "Der Spiegel" claimed December .

It said the company's CEO, Johannes Teyssen, had made up his mind to use the freed resourced for strategic investments in its home market Germany plus Russia, Britain and Sweden.

Back in 2008, Eon spent more than $9 billion (6.59 billion euros) to acquire Southern European interests, with "Der Spiegel" maintaining that hydroelectric power generation plants in Italy would be among the assets that the utility company was putting up for sale.

Savings offensive

Eon itself declined to comment on the report, saying only that the firm was "constantly reviewing strategic options for the entire group portfolio."

Too much power

Like its domestic rivals, RWE and EnBW, Eon has been suffering from falling wholesale electricity prices caused by overcapacities and competition from renewable, with the debt crisis in Southern Europe also weighing on the balance sheets.

The company is also mulling whether it should sell its Eon Mitte subsidiary to help it save 20 billion euros overall and thus bring down its debt load.

hgkms/ (AFP, dpa)