Germany’s RWE Is Said to Buy Essent for EU10 Billion

By Holger Elfes and Ambereen Choudhury

Jan. 12 (Bloomberg) -- RWE AG, Germany’s second-largest utility, agreed to buy Dutch power company Essent NV’s commercial operations for as much as 10 billion euros ($13.4 billion), people familiar with the transaction said.

The takeover may be announced as soon as today, said two people who declined to be identified because the talks are confidential. Essent spokesman Jeroen Brouwers declined to comment.

“RWE has a strong interest in the region and it may end up paying a full price for whatever asset it may buy,” London-based Citigroup Inc. analyst Alberto Ponti said in an earlier note.

RWE has been saying for two years it’s interested in increasing revenue outside its home market and in expanding in Benelux, Annett Urbaczka, a spokeswoman for Essen-based RWE, said today in a telephone interview. She declined to comment on specific reports about the plans.

RWE fell as much as 1 euro, or 1.6 percent, to 62.13 euros in Frankfurt trading and was at 62.52 euros as of 1:06 p.m. local time.

The deal would be the largest announced in Europe this year, according to data compiled by Bloomberg. The pace of mergers and acquisitions dropped 39 percent to $2.48 trillion in 2008 as the credit crisis checked companies’ ability to fund deals.

Dutch utilities began separating commercial operations such as production, trading and sales from grid operations in July after parliament approved a so-called unbundling law. Essent and Nuon NV, the second-largest Dutch utility, failed to merge in 2007 and are both seeking foreign partners.

To contact the reporter on this story: Paul Dobson in London at pdobson2@bloomberg.net