Energy Takeover
January 12, 2009
RWE said in Essen it aimed to take over Essent's commercial activities in gas and electricity. It said it would not acquire Essent's distribution network or waste disposal business, but the announcement did not give any details.
The transaction would convert Arnhem-based Essent, which has a workforce of 7,800, into the RWE operating company in the Netherlands and Belgium, but RWE would keep the Essent brand.
An announcement said the two utility companies had already reached agreement on the terms and conditions. Essent's top board supported it and recommended that Essent's shareholders accept the offer.
Big deal for RWE
The takeover would make RWE "one of the leading energy suppliers in the Belgium, Netherlands and Luxembourg (Benelux) region."
Essent's strong business as a generator of energy from renewable sources -- wind and biomass -- would help RWE's efforts to increase its renewables capacity to 4,500 megawatts by 2012, the statement said.
Both companies have also been experimenting with capturing carbon dioxide and storing it underground.
Essent's principal shareholders at the moment are the Dutch provincial administrations of Noord-Brabant, Limburg, Overijssel and Groningen and four municipal groups.
RWE chief executive Juergen Grossmann called it "a successful and attractive company with strong market positions in gas and in the power retail market in the Netherlands and Belgium."
RWE already has a Dutch unit, RWE Energy Nederland, supplying gas and electricity to 340,000 households and more than 50,000 businesses, while Essent has customers in various European nations.
"Through this transaction, RWE will gain 5.3 million customers, of which approximately 250,000 are based in Belgium and 1 million in Germany. Upon completion of the transaction, RWE will supply electricity to over 22.5 million customers and gas to approximately 12.5 million customers in Europe," the statement said.