E.on to sell US power and gas businesses
Divestment 'leaves room for organic growth', reduces debt levels.
The highly indebted German Energy company E.on has announced plans to sell its businesses in the US to utility provider PPL. The deal, worth US$7.6bn, has still to be given the go-ahead by US competition authorities.
E.on took on its US businesses when it acquired the UK's Powergen in 2002. Known as Market Unit US-Midwest, the group comprises Louisville Gas and Electric Company and Kentucky Utilities Company and it primarily operates in the regulated energy market in Kentucky.
E.on said the deal meant it had "already surpassed its target to realise at least €10 billion from the divestment of assets by the end of 2010".
E.on divested several assets in 2009 to reduce net debt, which nevertheless stood at US$59bn at year’s end.
Wulf Bernotat, E.on chief executive, said: "With this transaction we divest a strong and solid business. However, E.on US no longer provided us with much room for further strategic development.” The sale will leave Eon with more clarity in our portfolio and valuable room for organic growth," he added.
E.on's US renewables business is not affected by the sale.