VERBUND AG — M&A Activity 2001

Jul 9, 2001

News Details

Ad-hoc | 9 July 2001 12:46

Österreichische Elektrizitätswirtschafts AG

Ad hoc announcement transmitted by DGAP. The issuer is solely responsible for the content of this announcement. ——————————————————————————– Verbund, Austrias largest hydro power generator, and E.ON-Energie, the largest German hydro power generator, have agreed to merge their hydro power activities under the leadership of Verbund Verbund has reacted quickly to the challenges of the liberalised European electricity market and has focused its strategy on the shareholder value principle. Through cost cutting, streamlining and restructuring measures carried out as a consequence of the market opening, the company is prepared for the competition. Innovative distribution and sales schemes have brought significant success on the domestic as well as on the foreign markets. Now Verbund takes another important strategic step. After merging certain business activities with Energie Steiermark AG (ESTAG) in order to strengthen the competitiveness in Austria, Verbund now adds another important step by merging its hydro power activities with those of E.ON-Energie, one of the largest European utilities. The merger will lead to the formation of the second largest hydro power generator in Continental Europe with a production of 35 bn kwh of electricity in more than 200 power plants with a maximum capacity of approx. 9.600 MW. The newly founded company, European Hydro Power GmbH (EHP), will be under the leadership of Verbund and will have its headquarter in Austria. According to preliminary valuation, the shareholding in this company will be approx. 60 % Verbund and 40 % E.ON-Energie. The strategic goals of the merger are the following: – low cost producer of environment-friendly energy in Europe – strengthening of the competitiveness on the liberalised market – achieving synergies due to the geographical vicinity of power plants – increasing the enterprise values As a result of this solution, Verbund will be able to fully consolidate EHP in its financial accounts. The transaction will strengthen Verbunds earning position as well as degear the company significantly. In the long run, Verbund and E.ON-Energie are planning to develop joint market oriented business activities regarding their trading businesses. In a first step, a common shareholding in an European trading house in Berlin is intended by the partners. Verbund is granted the option to make use of the distribution know how of E.ON-Energie. end of ad hoc announcement (c) DGAP 09.07.2001 ——————————————————————————– WKN: 074640; Index: ATX Listed: Amtlicher Handel in Wien; Amtlicher Handel in Frankfurt; Freiverkehr in Berlin, Hamburg und Stuttgart 091246 Jul 01