German utility sells electronics unit

Schroders is buying part of E.ON's electronics arm

German utility E.ON is to sell its electronics businesses to a US-European consortium for 2.6bn euros ($2.4bn).

The purchase price includes 1.6bn euros in debt, E.ON said.

E.ON was created earlier this year from the merger of German utilities Viag and Veba.

Under the deal, Schroder Ventures Funds will acquire UK-based Memec, a semi-conductor distribution company which E.ON said had sales of 1.7bn euros in 1999 and 2,300 employees in 40 countries.

New York-based Arrow Electronics will buy Wyle Components, Wyle Systems and Atlas Services North America, all based in Irvine, California.

And Avnet, based in Phoenix, Arizona, is to purchase EBV Electronik, Atlas Logistic Services Europa and RaabKarcher Electronic Systems.

Strengthening core businesses

The seven businesses being sold are managed by E.ON subsidiary Veba Electronics.

The deal is subject to regulatory approval.

E.ON chairman and chief executive Ulrich Hartmann said proceeds from the sale would be used to strengthen the group's core energy and specialty chemicals businesses.

The group's share price dipped following announcement of the sale. At 08.50 GMT, it stood at 58.77 euros, down 0.99 on the day.