E.ON SE

M&A Activity • Jul 16, 2001

News Details

Ad-hoc | 16 July 2001 07:31

E.ON AG english

Ad hoc announcement transmitted by DGAP. The issuer is solely responsible for the content of this announcement. ——————————————————————————– E.ON aquires a substantial interest in Ruhrgas and brings Veba Oel into promising partnership with BP —————————————————————— E.ON AG, Düsseldorf, and BP plc, London, have agreed to reorganize their oil and gas activities in Germany. In the course of a capital increase at the turn of the years 2001/2002, E.ON will acquire a stake of 51% in BP subsidiary Gelsenberg AG, which holds 25,5% of Ruhrgas AG. In a second step, BP will have the option as of January 2002 to sell the remaining 49% of Gelsenberg to E.ON. At the same time, BP will acquire a stake of 51% in Veba Oel AG, Gelsenkirchen – also by way of capital increase at the turn of the year. As part of the capital increase BP will redeem the shareholder loans granted by E.ON of approximately 1.9 billion euros. E.ON will be able to exercise a put option as of April 2002 to sell the remaining 49% of Veba Oel. When both sides exercise their put options E.ON will have received 25,5% of Ruhrgas, a cash balance of Euro 400 million plus adjustments and repayment of shareholder loans of approximately 1.9 billion euros. On the basis of a value of 2.4 billion euros for the Ruhrgas stake the equity value of Veba Oel is 2.8 billion euros. Therefore, with repayment of shareholder loans and assumption of financial debt and of pension liabilities by BP, E.ON achieves an enterprise value of approximately 6.5 billion euros for Veba Oel. Both transactions are still subject to approval by the anti-trust authorities. end of ad hoc announcement (c) DGAP 16.07.2001 Issuer’s information/explanatory remarks concerning this ad hoc announcement: E.ON in the Fast Lane Acquisition of a Substantial Interest in Ruhrgas Veba Oel: Promising Partnership with BP —————————————————————— E.ON AG, Düsseldorf, and BP plc, London, have agreed to reorganize their oil and gas activities in Germany. In the course of a capital increase at the turn of the years 2001/2002, E.ON will acquire a stake of 51% in BP subsidiary Gelsenberg AG, which holds 25,5% of Ruhrgas AG. In a second step, BP will have the option as of January 2002 to sell the remaining 49% of Gelsenberg to E.ON. At the same time, BP will acquire a stake of 51% in Veba Oel AG, Gelsenkirchen – also by way of capital increase at the turn of the year. As part of the capital increase BP will redeem the shareholder loans granted by E.ON of approximately 1.9 billion euros. E.ON will be able to exercise a put option as of April 2002 to sell the remaining 49% of Veba Oel. When both sides exercise their put options E.ON will have received 25,5% of Ruhrgas, a cash balance of 400 million euros plus adjustments and repayment of shareholder loans of approximately 1.9 billion euros. On the basis of a value of 2.4 billion euros for the Ruhrgas stake the equity value of Veba Oel is 2.8 billion euros. Therefore, with repayment of shareholder loans and assumption of financial debt and of pension liabilities by BP, E.ON achieves an enterprise value of approximately 6.5 billion euros for Veba Oel. Both transactions are still subject to approval by the anti-trust authorities. Strategic Growth Step in E.ON’s Core Business of Gas By acquiring a majority stake in Gelsenberg at the turn of the year, E.ON will obtain a substantial interest in Ruhrgas. The company is Germany’s largest gas importer and one of Europe’s top three gas companies. The activities of Ruhrgas in the field of long-distance gas supply ideally complement the E.ON Group’s good position in gas retailing. Both companies also share attractive common ground in their international activities. Both Ruhrgas and E.ON, for instance, own stakes in Scandinavia, the Baltic countries and Eastern Europe. Attractive Prospects for Veba Oel The partnership with one of the world’s leading oil companies provides excellent prospects for Veba Oel and its employees. Because of its strong position in Europe’s biggest mineral oil market, Veba Oel will play an important role in the BP Group. Aral, Germany’s leading gas station brand, will be preserved. BP has promised that it will continue to manage the German downstream activities from within North-Rhine Westphalia. At the same time, the sale of Veba Oel will be one of the biggest projects that E.ON will implement in the framework of its consistent divestment strategy. With these transactions, E.ON will be successful for the second time this year – following the announced acquisition of the British utility Powergen – in achieving a strategic “double hit”: E.ON will substantially strengthen its position in its core business of gas, and it will take another major step in its strategy of focusing on the energy business. E.ON CEO Ulrich Hartmann stated: “We’ve found an optimal solution for our oil business: Veba Oel will anchor the BP Group1s operations in Germany, opening the door to an excellent future for Veba Oel and its employees. Moreover, the agreements with BP are of considerable strategic importance for E.ON. They give us the unique opportunity to combine, as part of the focus on our energy business, the divestment of Veba Oel with unprecedented growth in the attractive gas sector, one of our core businesses.” ——————————————————————————– WKN: 761440; Index: DAX, EURO STOXX 50 Listed: Amtlicher Handel in Berlin, Bremen, Düsseldorf, Frankfurt, Hamburg, Hannover, München und Stuttgart; Eurex; Swiss Exchange; New York 160731 Jul 01