UPDATE 1-Berlin plans to buy city’s power grid from Vattenfall

(Adds details from press conference, context)

FRANKFURT, Oct 23 (Reuters) – Berlin’s city government plans to buy the electricity grid Stromnetz Berlin from Swedish utility Vattenfall, the German capital’s finance minister and mayor said on Friday.

Finance minister Matthias Kollatz said the move was aimed at creating better conditions for preparing the 35,000 kilometre distribution network for climate protection measures as part of a transition towards decarbonisation.

“We are taking over a good company,” finance minister Matthias Kollatz told a virtual press conference.

The transaction will need the consent of the city’s parliament to go through, and the deal is expected to be conditionally approved at the end of the first quarter 2021, and then backdated to Jan 1, 2021 if politicians consent.

The price would be somewhere in the middle between one and three billion euro ($1.2-3.6 billion), Kollatz said.

The proposed takeover will be done in close consultation with Vattenfall, with a view to preserving jobs.

State-owned Vattenfall earlier said it offered to sell the infrastructure to end a long-running legal dispute.

The planned move is subject to approval by the company’s relevant boards.

Berlin policymakers are keen to develop a growing digital economy in the city to boost growth in light of high levels of debt and unemployment.

Berlin is home to hundreds of start-ups which include companies focusing on smart grids, electric mobility, blockchain applications, energy efficiency and storage.

More:  RPT-Trump says he does not mind if Microsoft buys TikTok

Kollatz said the city was well suited to integrate the grid with these new services.

Transmission networks are regulated and therefore offer steady income streams.

Siemens Energy, the energy spin-off of the technology group, recently decided to base its headquarters in Berlin while leaving its administration in Munich.

Kollatz also said Berlin was aiming to acquire a majority stake in gas supplier company Gasag, which is currently owned by Vattenfall, E.ON and Engie.

But Vattenfall would continue to operate the communal heating network in Berlin for the longer term.

$1 = 0.8443 euros Reporting by Vera Eckert and Tom Kaeckenhoff, editing by Caroline Copley and Jane Merriman

Source


More from: | Category: M&A News