March 2, 2010 4:41 am

Eon puts US supply arms up for sale

  • Share
  • Print
  • Clip
  • Gift Article
  • Comments

Eon, the German energy group, has put Louisville Gas and Electric and Kentucky Utilities, its US supply companies, up for sale with an estimated price of about $6bn, according to people familiar with the situation.

Duke Energy of North Carolina and PPL of Pennsylvania are possible buyers, according to SparkSpread, an industry news service.

Eon went on an ambitious push for international expansion up to 2008, but has since been retrenching and selling assets, like several other large European energy groups.

Last year it set a target of raising at least €10bn ($13.5bn) from disposals by the end of 2010.

Eon announced last week that it had sold its high-voltage transmission network for €1.1bn, and last year sold Thüga, its holding company for municipal utility stakes, for about €2.9bn.

The proceeds from the sales are being used to pay down Eon’s debts, which were €47bn at the end of June last year.

Marcus Schenck, Eon’s chief financial officer, told a German newspaper last month that banks had become more willing to finance acquisitions, helping the company’s disposal programme.

Wulf Bernotat, Eon’s chief executive, said last year the company was investing in energy supplies “with the focus on Europe”.

LG&E and Kentucky Utilities between them have about 900,000 customers for electricity and 310,000 for gas, and about 8,000 megawatts of generation capacity.

The businesses were acquired with Powergen of the UK, which Eon bought in 2002.

Eon is being advised on the sale by Goldman Sachs, according to SparkSpread, while Duke Energy is being advised by JPMorgan and Barclays Capital.

The companies and their advisers refused to comment.

Copyright The Financial Times Limited 2015. You may share using our article tools.
Please don't cut articles from FT.com and redistribute by email or post to the web.

  • Share
  • Print
  • Clip
  • Gift Article
  • Comments

NEWS BY EMAIL

Sign up for email briefings to stay up to date on topics you are interested in

SHARE THIS QUOTE