VERBUND AG — M&A Activity 2002

Apr 29, 2002

News Details

Ad-hoc | 29 April 2002 10:39

Österreichische Elektrizitätswirtschafts AG

Verbund and Energie Allianz to form an Austrian electricity solution Ad-hoc-announcement transmitted by DGAP. The issuer is solely responsible for the content of this announcement. ——————————————————————————– The concept of an Austrian electricity solution, agreed between the partners, which has been negotiated since February 2002, comprises the value adding levels production, trading and sales of electricity. The core of the solution is a joint trading company under the corporate management of Verbund. The utilities concerned supply their entire producion volumes exclusively to the trading company and will receive in return a market price that is linked to quotes at the European electricity exchanges. The joint trading company handles approx. 100 TWh of electricity including volumes which are bought from European electricity markets and supplies exclusively the distribution channels of the partners at market prices. The wholesale business in Austria and abroad as well as the trading business continue to be carried out by the joint trading company under the corporate management of Verbund. The business customers with a demand of more than 4 GWh per year will be supplied by a joint business customers sales company to be established, which will be under the corporate management of Energie Allianz. To secure competition in the household customer market, the sales channels of the partners remain independent. As a compensation for the long term guarantee of electricity from hydro power for the Austrian household customers, Verbund gets a 1.1 EUR/MWh premium. Subject to the approval of the partner companies’ supervisory boards and shareholders meetings and the approval of the antitrust commission, the planned electricity solution should be negotiated in detail by the end of June 2002. The Austrian electricity solution brings Verbund a lot of quantitative advantages. First analyses about the synergy potential have shown that Verbund even in a short term view can gain a lot of synergies. In addition to cost synergies resulting from merging the trading and business customers sales organisations as well as synergies resulting from the joint control of the power plants, there are some market synergies, like the premium for the hydro power electricity from hydropower. Due to the Austrian electricity solution, the planned hydro power merger between Verbund AHP and the German utility E.ON, the formation of the European Hydro Power, is no longer possible. Verbund and E.ON, however, are trying to find alternative ways of cooperation based on their long-term good relationship. end of ad-hoc-announcement (c)DGAP 29.04.2002 ——————————————————————————– WKN: 074640; ISIN: AT0000746409; Index: ATX Listed: Amtlicher Handel in Wien; Amtlicher Handel in Frankfurt; Freiverkehr in Berlin, Hamburg und Stuttgart 291039 Apr 02