U.S. Water News Online
LONDON -- German power utility RWE AG has staked its claim
to the global water industry big league with a 4.3 billion pounds
(7.1 billion euros) agreed cash bid for Britain's Thames Water.
The 12.15 pounds per share purchase of Britain's largest water
company creates the world's third-largest water and waste group
behind France's Vivendi Environnement and Suez Lyonnaise des Eaux.
The German giant paid a 32.8 percent premium to Thames's closing
price to combine its financial fire power with Thames's international
water assets and expertise.
Thames has 23 million water customers in the Americas, the Middle
East and Asia. RWE has 11 million in Germany and Hungary, backed by a
group market value of 20 billion euros that makes it one of Europe's
``big six'' utilities.
For RWE Chief Executive Dietmar Kuhnt, the combination provides
critical mass to target a sector with huge growth potential.
``These opportunities are driven by factors such as population
growth, urbanization, and tougher environmental standards,'' Kuhnt
told a news conference in London.
RWE expects global revenues for private sector water companies to
grow to 430 billion euros by 2010 from 90 billion today, with U.S.
operations and management deals the driver. Globally, water remains
highly fragmented, but Vivendi, Suez, Thames and others are already
exploiting consolidation opportunities in the United States and
The combined water operations are to be run out of London under
Thames Water Chief Executive Bill Alexander. The partners hope to
complete within 50 days after U.S. approvals.
``This is a growth story. It's not about cost-cutting,'' Alexander
said. ``We see a bright future for the new combined business which
can take advantage of our strong international position and RWE's
Cash-rich but under pressure to find growth outside a very
competitive German electricity market, RWE said it would finance 4.0
billion euros of the transaction from existing cash.
Return to the
U.S. Water News' past archives page
Return to the U.S. Water
Use a comma to separate e-mail addresses:
Hi, I thought you might like to read this article.