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The BBC's Russell Hayes
"Powergen is recommending its shareholders approve the take over"
 real 56k

The BBC's Duncan Bartlett
"This will now need approval from regulatory authorities all over the place"
 real 28k

Tuesday, 10 April, 2001, 11:26 GMT 12:26 UK
E.ON powers into Sweden
E.ON logo
E.ON is Germany's largest utility
Germany's largest utility is striding forward, winning EU approval to buy Sweden's Sydkraft the day after it announced a bid for the UK's Powergen.

The control of Sydkraft is part of a drive to be a leading player in Europe's consolidating power market.

We're getting ready for a double jump across the Channel and from there on across the Atlantic

Ulrich Hartmann
E.ON Chairman
Sydkraft is the largest private utility in Sweden, with a strong position in the gas and power markets as well as targeting new services such as broadband.

E.ON will now go ahead and acquire the majority of shares - and the all important voting rights - from four local Swedish municipalities, valuing the firm at $4.22bn.

E.On and on and on

E.ON has agressively expanded beyond its local market, and is also widely rumoured to be in negotations for one of Spain's leading power firms.

And if its deal with Powergen goes ahead, it will also win itself an important foothold in the US market.

powergen logo
Powergen launched a high-profile advertising campaign
The bid for Powergen is its biggest to date, valuing the firm at 8.2bn euros (5.15bn).

Powergen has a well known brand name in the UK, following its high profile advertising campaign which includes sponsoring weather reports.

But the takeover must first by scrutinised by a host of regulators, with the deal not expected to be finalised until Spring next year.

The European Commission, UK energy watchdog Ofgem, several US state utility regulators and the US Federal Energy Regulatory Commission must all clear the deal before it gets the green light.

E.ON, based in Dusseldorf, was formed last year from the merger of German utilities Veba and Viag.

The company is seeking investments outside Germany, where tough competition has eroded earnings at its core energy business.

At 1236 (1036 GMT) E.ON's shares were up 3.88% at 56.56 euros.

Market shake-up

The UK's liberalised electricity market is proving popular with foreign investors.

Press reports on Sunday said that Electricite de France (EdF) was preparing a 1.5bn bid for electricity distributor Seeboard.

Seeboard has penetrated the gas and electricity market in the southeast of England, but was recently put up for sale by its US owner, American Electric Power.

EdF already owns the majority stake in London electricity alongside Virgin Energy.

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See also:

09 Apr 01 | Business
German takeover bid for Powergen
10 Apr 01 | Business
Europe's utilities power struggle
31 Aug 00 | Business
Europe's energy giants ponder merger
11 Dec 00 | Business
Power trade left 'open to abuse'
06 Sep 00 | Business
Powergen profits fall
27 Mar 01 | Business
German utility silent on Powergen
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