German utilities giant E.ON (EONGn.DE) will sell its entire end-customer electricity and gas business in the Czech Republic to Hungarian energy group MVM, E.ON said in a statement on Saturday.
FILE PHOTO: E.ON headquarters in Essen, Germany, March 15, 2017. REUTERS/Thilo SchmuelgenMVM joined a shortlist of Czech groups bidding for Innogy’s nearly 1.6 million gas and electricity customers in the Czech Republic in May and emerged as the frontrunner, sources told Reuters at the end of June.
Czech billionaire-owned energy and investment groups EPH, KKCG and Sev.en Energy also bid, sources had said.
For MVM, which is state-owned, the Czech deal is part of a push to expand into central and eastern Europe, its chief executive said in an interview in early June.
MVM, whose assets include Hungary’s nuclear power plant, gas-fired and solar power generation capacities, the Hungarian grid operation and interests in the gas market, said on Saturday it aimed to boost competitiveness in the Czech market.
“This acquisition for us represents a significant milestone in our development strategy,” CEO Gyorgy Kobor said in a statement.
The deal is still subject to European Commission approval but is expected to close by the end of 2020.
The Czech business belonged to Innogy (INNOG.S), which E.ON bought in 2019. As part of the antitrust approvals process for the acquisition, E.ON had to dispose of various assets, including the Czech business.
“This transaction marks the final step in the fulfilment of the remedies offered by E.ON in the context of the antitrust approval of E.ON’s takeover of Innogy,” E.ON said.
No financial details were disclosed.
A source told Reuters in March that E.ON had hoped to fetch more than six times core earnings, a valuation
of 800 million to 900 million euros ($1.02 billion). It was unclear what impact the coronavirus crisis had on valuations.