Combined Cycle

E.ON settles with opponents to secure Ruhrgas merger

31 January 2003 – E.ON is to go ahead with its planned merger with Ruhrgas having reached agreements with all nine companies opposing the merger, the German utility has confirmed today.

All opponents have now dropped their legal cases against the transaction leaving the way clear for E.ON to acquire the RAG-stake in Ruhrgas. Simultaneously, RAG will proceed with its offer to the Degussa-shareholders. In addition, the Ruhrgas shares owned by Shell, ExxonMobil and others will shortly be acquired by E.ON.

With opponents EnBW and Fortum, E.ON has reached agreements on a commercial basis. Essentially, these deals involve an exchange of shareholdings.

E.ON will also acquire a stake in Concord Power under an agreement with EnBW and Saalfeld Group, the current owners of Concord Power. Concord Power plans to build a new Combined Cycle Gas Turbine Power Station in Lubmin on the Baltic Sea.

With the other opponents Ampere, ares Energie, Gruppen- Gas- und Elektrizitätswerk Bergstraße, Stadtwerke Aachen, Stadtwerke Rosenheim and Trianel, E.ON has reached agreements based on gas and electricity supply contracts, the provision of assets and shareholdings, marketing support and other financial payments. These agreements lead to a total financial cost of approximately EUR90m.

In addition, Ruhrgas has reconfirmed to all the parties its commitment to open and fair competition in the gas market. There are no financial consequences arising from this commitment.

E.ON-CEO Ulrich Hartmann said, “This settlement with the opponents makes it possible for us to complete the take-over of Ruhrgas immediately. This deal allows us to kick-start the expansion of our gas business enabling us to compete effectively against other major European gas companies. In addition, this settlement comes just in time to allow us to dispose of our Degussa shares. Against this background, the commitments we have made to the opponents are reasonably bearable.”

Although the German judicial system has accepted the deal, EU competition authorities may yet be called to examine the arrangement, which it has previously declined to do on the grounds that it was a German market issue.