Verbund AG (VER.VI), Austria's leading electricity company, said Monday it would acquire a total of 13 hydro power plants along the river Inn from German utility E.ON AG (EOAN.XE).
The power plans have a capacity of 312 MW. Last year E.ON has been obliged by the EU-commission to sell a total capacity of approx. 5,000 MW of their German power plants.
According to this obligation, E.ON has launched 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 1,847 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 intends to offer a stake of up to 30 % of the acquired Inn hydro power plants 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 approx. 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.
The acquisition of the power plants in Germany supports Verbund's successful retail and trading activities in one of it's defined core markets. The German electricity market - providing an annual sales volume of approximately 22,700 GWh, which corresponds to approx. 40% of the total sales volume of Verbund - is Verbund's main international market.
In addition, 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 subject to certain conditions precedent, including, in particular, approval by the competent anti-trust authorities.