The second biggest German power company, RWE, said Monday it had agreed a 9.3-billion-euro (12.5-billion-dollar) take-over of Dutch peer Essent in the biggest European take-over this year. The deal makes RWE a major energy supplier across much of western Europe and should protect the German company from becoming a take-over target in turn.
The two groups "have today reached agreement on the terms and conditions for a binding all-cash offer by RWE to the shareholders of Essent for the acquisition of all of the issued and outstanding shares in Essent," the RWE statement said. Essent's distribution networks and waste management operations were not included in the deal.
RWE has also been interested in expanding outside its core markets of Germany and Britain, and the deal makes it "one of the leading energy providers in the Benelux" region of Belgium, Netherlands and Luxembourg, the statement said. The deal is subject to RWE being able to secure at least 80 percent of Essent's issued and outstanding share capital and would be finalised following approval from relevant competition authorities, it added.
The German group had earlier sought to buy British Energy, which was snapped up by French rival EDF, and the Russian company TGK-2, a deal that collapsed when the two sides were unable to agree on a price. RWE finally became itself the object of take-over rumours, with EDF said to be among those interested. With Essent, RWE will vary its sources of production and improve its average level of carbon dioxide emissions, a topic which is gaining in importance in Europe.
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