At today’s VERBUND special meeting of stockholders the syndicated companies EVN, Wienstrom and TIWAG, which are jointly holding approximately 27 percent of VERBUND, refused to consent to a merger solution.
"Contrary to any economic reason", as Mr. Hans Haider, Chairman of the Board of Management, says regretfully. "For some reason or other, the partners of the syndicate were impervious to even the most valid objective arguments. Thus a big chance for VERBUND and for the whole Austrian electricity industry was missed", Mr. Haider says. Rare chance for all stockholders given away.
The opportunity that was given away will hit at least the Federal Government, the principal stockholder of the VERBUND company, hard. Economies of scale and a modern and competitive cost structure are only realizable through a full merger. The merger of VERBUND, EStAG and Energie AG Oberösterreich alone would have brought ATS 3.8 billion (EUR 280m) of yearly cost savings. With 700,000 customers and power sales amounting to 41,000 gigawatt hours, Energie Austria would have ranked among the top 15 of European power suppliers; in the relevant market (radius of 500 kilometres) it would even have been sixth place.
However, the future of VERBUND is to be rated positive even after Energie Austria has been blocked. With its results for the first six months of 2000, the biggest Austrian power group has proved that it is well-prepared for the free market. The operating result of VERBUND improved by four percent, increasing to ATS 2.021 billion (EUR 147m), within the first six months of the current business year. Power sales increased by 17 percent; in international power trading a sales increase of ATS 949.5 million (EUR 69m) was achieved.
Thus VERBUND is ready to confront the challenges of a liberalized electricity market even in a forced stand-alone solution, for the time being. "VERBUND will increasingly turn to the Austrian and the European markets now", says Mr. Haider about the company’s future orientation.
Big interest in VERBUND shown in Austria and abroad
For various reasons Mr. Haider is very sceptical as far as a new opportunity for an overall Austrian solution is concerned. "The concept of Energie Austria would have offered the one-off chance to obtain the consent of the power giant EdF, who is holding the blocking minority of EStAG. After today’s decision it is not likely that EdF will consent to the Austrian solution a second time."