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---------------------- Forwarded by Iona Maclean/LON/ECT on 17/11/2000 11:45
--------------------------- djcustomclips@djinteractive.com on 17/11/2000 10:56:10 Please respond to nobody@mail1.djnr.com To: 96939@mailman.enron.com cc: Subject: Enron in Europe: E.On fails in bid to expand water business E.On fails in bid to expand water business 11/17/2000 Handelsblatt English Summary Copyright 2000 Handelsblatt. Source: World Reporter (Trade Mark) - FT McCarthy. HB/svu DUSSELDORF. Expansion plans of German utility E.On AG suffered another setback Thursday with the failure of takeover negotiations with water utilities Azurix of the U.S. and France's Saur. Hans-Dieter Harig, head of E.On Energie AG, confirmed to Handelsblatt that talks with Azurix had been called off, and that negotiations with Saur, France's third-largest water utility, had also ended unsuccessfully. These latest developments appear to bring to an end for the time being to plans by E.On chairman Ulrich Hartmann to take his group to the top of the industry rankings in its core energy segments electricity, gas, and water. In August this year, E.On pulled out of advanced talks with France's water giant Suez Lyonnaise des Eaux, after the two companies failed to reach agreement on valuation. The takeover of Azurix stumbled at the same hurdle, sector insiders said even though Azurix's parent, U.S. energy group Enron, has been trying to sell the unit for some time. In 1999, Azurix generated sales of around $618 million. Talks with Saur were broken off at an early stage, people familiar with the matter said. E.On's official line is that "no negotiations are taking place with Saur." The French group generated sales of 2.3 billion euros on 1999. The failure of the talks now puts E.On at a disadvantage vis-a-vis its closest German rival, RWE AG. RWE chairman Dietmar Kuhnt this week proudly announced the completion of the takeover of Britain's Thames Water, which takes his Essen-based group to third position in the European water-utility rankings, behind France's Suez and Vivendi. E.On, meanwhile, appears to have few options left that would allow it to grow quickly through acquisitions. Instead, it is now likely to pursue its goals in smaller steps. The group's growth strategy has so far only been realized in electricity. Through its creation from the merger of Veba and Viag it moved up to fourth position in Europe, behind Electricite de France, Italy's Enel and RWE. The latter gained a slight lead on E.On through its merger with VEW AG. In gas, E.On still has some ground to cover. Hartmann has been trying for month to buy a majority stake in Ruhrgas AG, Europe's largest gas trader. He has the support of Klaus Liesen, who chairs the supervisory boards of both E.On and Ruhrgas. But Ruhrgas' complicated shareholding structure is likely to make any investment lengthy and expensive. Co-shareholders Thyssen-Krupp and Mannesmann/Vodafone as well as oil multinationals like BP, Shell or Exxon-Mobil are likely to sell their shares in Ruhrgas only at high premiums. Sector insiders said premiums of up to 30% were currently under discussion. Ruhrgas' current market value stands at more than 10 billion euros. Folder Name: Enron in Europe Relevance Score on Scale of 100: 82 ______________________________________________________________________ To review or revise your folder, visit http://www.djinteractive.com or contact Dow Jones Customer Service by e-mail at custom.news@bis.dowjones.com or by phone at 800-369-7466. (Outside the U.S. and Canada, call 609-452-1511 or contact your local sales representative.) ______________________________________________________________________ Copyright © 2000 Dow Jones & Company, Inc. All Rights Reserved
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