E.ON has been obliged by the EU-commission to sell a total capacity of 5,000 MW of their German power plants. According to this obligation, E.ON has lanced a tendering procedure of 13 run-of-river power plants along the Bavarian part of the river Inn with a total capacity of 312 MW. Verbund has participated and successfully acquired the power plants. The annual generation totals 1,850 GWh and corresponds to approximately 9 % of the total run-of- river production generated by Verbund.
The acquisition price consists of a cash purchase price and a 20 year electricity purchase and service contract for the Verbund owned power plant group Zemm/Ziller. E.ON and Verbund agreed upon silence about the exact sum of the acquisition price.
Verbund is going to run a subsidiary company in Germany for the acquired Inn hydro power plants and intends to offer a stake of up to 30 % of this company to interested Bavarian municipalities.
This transaction fits perfectly with Verbund’s long-term development strategy to enforce the Austrian group’s position as one of Europe´s leading hydro power producers. In Austria, Verbund operates storage and run-of-river hydro power plants with a total capacity of more than 6,600 MW, has currently 500 MW hydro power plant projects under construction and is planning the realisation of 550 MW more until 2015. In addition hydro power is genuine part of its international growth strategy as well: The group is targeting to acquire hydro concessions in France as part of its joint venture Poweo’s business plan and the enforcement of its activities in French energy market. In Turkey, Verbund is planning and constructing nine hydro power plants with a total capacity of approximately 1,000 MW together with its regional partner Sabanci group. Furthermore Verbund recently celebrated the groundbreaking ceremony for the construction of a 48 MW run-of-river power plant in Albania.
Furthermore, this acquisition supports Verbund’s successful retail and trading activities in Germany. The German electricity market - providing an annual sales volume of approximately 22,700 GWh - which corresponds to 40 % of the total sales volume of Verbund- is Verbund’s main international core market. Besides Verbund is going to benefit from multiple synergies having VERBUND-Austrian Hydro Power’s plants close-by the acquired plants on the river Inn.
The closing of the transaction is scheduled for quarter 3/2009 and is still subject to certain conditions precedent, including, in particular, approval by the European Commission and the competent anti-trust authorities.