DUESSELDORF (dpa-AFX) - German utility E.ON AG (EONGY.PK) agreed Wednesday to sell its gas transmission company in Germany to a consortium led by Australia-based Macquarie Group Ltd (MQG.AX) for about 3.2 billion euros or $4.0 billion. The parties signed the sale contracts today. The deal is expected to close in the third quarter of 2012.
The Macquarie-led consortium consists of Macquarie European Infrastructure Fund 4, Infinity Investments, British Columbia Investment Management Corp., and MEAG MUNICH ERGO Asset Management. The consortium already has experience of German regulated assets with stakes in Amprion GmbH and Thyssengas GmbH.
There were another three bidding consortium's in the fray to acquire Open Grid Europe. The three groups were led by Germany's Allianz SE, French electric utility GDF Suez S.A., and Belgium-based Fluxys.
Germany's leading gas transmission company Open Grid Europe has been an independent natural gas transmission operator since 2010, with a network of pipelines stretching over around 12000 kilometers across much of Germany.
The purchase price of about 3.2 billion euros includes an agreed enterprise value of about 2.9 billion euros plus adjustments for pensions and other assets.
The sale of Essen-based Open Grid Europe is part of E.ON's announced goal of generating about 15 billion euros through divestments by the end of 2013 in order to reduce debt of about 37.6 billion euros, and to invest in growth businesses.
With this sale, E.ON has already recorded divestment proceeds totaling more than 12 billion euros. The asset sale program is now expected to exceed the targeted volume of 15 billion euros.
The company is also in the process of reduce costs by 9.5 billion euros through 2015, as it struggles to cope after Japan's nuclear disasters cast a negative light on nuclear power. Related to the cost savings, E.ON announced 11,000 job cuts in late January.
In Wednesday's regular trading session, EONGY.PK is currently trading at $19.50, up $0.11 or 0.57% on a volume of 22,007 shares. E.ON shares are trading on Frankfurt's Xetra lower by 0.02 euros or 0.13% at 15.28 euros
Copyright RTT News/dpa-AFX