Why have Europe’s utility companies become so fond of partially listing bits of their businesses? Germany’s RWE has just completed an initial public offering of part of its US subsidiary, American Water. In 2007, Spain’s Iberdrola listed a fifth of its renewables division. Enel, Italy’s largest utility, may spin off some or all of its renewables business as well as its gas and electricity distribution networks. A partial listing of Suez’s environmental arm looks set to be a condition of the much-delayed merger with GdF in France.

Companies argue that listings reveal the value of misunderstood business lines. Partial, rather than full, disposals allow managements to hang on to some of the cash flows from fast-growing units and retain synergies. Suez, for example, says there are valuable overlaps between its energy and environment businesses that justify its keeping a third of Suez Environnement. Such reasoning is often disingenuous. RWE was right to float part of American Water after it failed to become a full-service “multi” utility – but only because it plans a full exit later.