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Eon ready to withdraw from ownership of local energy and water networks
Eon is preparing to sell its municipal holding company Thuga, according to German press reports citing company sources. Thuga has stakes in almost 100 energy and water utilities with their own distribution networks across Germany. The Dusseldorf group reportedly wants to sell Thuga as a single unit, with GdF Suez and Spanish suppliers in pole position for the €3-4 billion disposal.
Thuga is Germany's biggest municipal holding, with revenues of €15 billion. Most of Eon's assets are minority stakes. Among the suppliers involved are Berlin gas firm Gasag, Frankfurt supplier Mainova and the municipal utilities for Dresden, Essen and Hanover.
A consortium led by Cologne utility Rheinenergie and Mannheim-based regional supplier MVV Energie also has a long-standing interest in Thuga, and it came close to agreeing a deal with Eon earlier this year. However, the Federal Cartel Office (FCO) was thought unlikely to clear any German bid for Thuga on competition grounds. The authority has repeatedly pressed Eon and RWE to cut their communal holdings.
Alongside this pressure from the FCO, Eon is aware that profits are moving from power distribution to power generation. The energy regulator has already imposed cuts on grid fees this year, and cost-based regulation is likely to bear down further on profits. The parent group could also end up competing for customers with its own holding in a liberalised market. Eon, which first announced plans to sell Thuga last year, refused to comment on the latest reports.
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