Swedish energy company Vattenfall (VTT.DE) today announced that it will purchase Dutch Nuon for EUR 8.5 billion.
The companies said in a release that the acquisition will "boost the transition towards a climate neutral operation by 2050."
Vattenfall has made an all cash offer of EUR 8.5 billion enterprise value for 100% of the shares, equalling EUR 10.3 billion for the equity of Nuon’s production and supply company after 2008 dividends. Nuon’s grid company Alliander is not included in this transaction.
The partners have agreed that Vattenfall acquires initially 49% of the shares. The remaining 51% of the shares will be acquired in the coming six years under fixed terms. Following the initial acquisition of 49% Vattenfall will have operational control over Nuon.
The Management Board and Supervisory Board of Nuon have unanimously recommended the offer to the Nuon shareholders. Subject to approval by the Nuon shareholders, the transaction is expected to close by the end of 2Q09.
Lars G. Josefsson, CEO of Vattenfall, said: “I’m very pleased that we can take this important step. Nuon’s widely respected knowledge in renewables and clean energy technologies is a very valuable addition to our own. It will accelerate the realisation of Vattenfall’s strategy to make electricity clean.”
Both Nuon and Vattenfall are known for their innovations in renewable and clean energy. The companies said they will join forces, to continue to develop projects, such as the carbon capture and sequestration (CCS) installations at Schwarze Pumpe (Vattenfall, Germany) and Buggenum (Nuon, The Netherlands).
Investing in off-shore wind will also be a key priority, adding to current large wind farms such as at Egmond aan Zee (Nuon), Lillgrund and Kentish Flats (Vattenfall). This will support the combined group’s ambition to generate 15 terawatt giyrs (TWh) of wind power by 2015 (compared to 2.5TWh in 2009). Other alternative energy sources, such as solar foil development and ocean power, are part of the R&D investments of the combined companies.
The consideration for the acquisition of the initial 49% of the shares will be funded through a committed debt financing of EUR 5 billion with nine banks and freely available cash reserves.
Nuon serves more than three million consumers and organizations with over 10,000 employees in the Netherlands, Belgium and Germany. With a turnover of EUR 6.1 billion in 2008, Nuon occupies a prominent position in the Dutch energy market. The shares are held by local and regional authorities. As from 1 July 2008 Nuon organisationally separated the company into a network company (Alliander) and a production and supply company (Nuon). As from that date, both companies operate independently under a single financial holding company and under a joint Management Board.
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