FRANKFURT - German utility RWE has announced that it would be offloading its subsidiaries RWE Thames Water Plc and American Water Works Company Inc, so that it can direct all its energies towards its core power businesses. It is estimated that both the businesses would net RWE almost €16 billion (£10.8 billion).
RWE had purchased Thames Water in 2000 for €7 billion, while American Water was acquired for €4.5 billion in 2003. Reading-based RWE Thames Water happens to be the world's third-biggest provider of water and wastewater services and UK's largest company.
RWE said that it plans to sell the Vorhees, New Jersey-based American Water first. They could do this either by an initial public offering or inviting bids financial investors. However, any process would have to approved by RWE's supervisory board as well as the concerned regulators.
Announcing the intentions of the company, RWE Chief Executive Harry Reols said, "The transactions will lead to greater transparency of the value of our water business. Both American Water and RWE Thames Water are market leaders in their respective regions. As stand-alone entities, they are well positioned to continue on their stable growth paths going forward and maintain the breadth and quality of their service." Both the water companies accounted for 9.6 percent of the total sales of the parent company in 2004.
Thames Water is the main supplier of water in the UK and employs 4,000 people. It also supplies sewage services to 13 million customers in the country. RWE also said that it intends to sell its Spanish water firm Pridesa and that all the deals would be concluded by 2007.
Posted
on : Sun, 06 Nov 2005 15:05 GMT | Business News
By : Pippa Fielding
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