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Veba electronics unit sold
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August 7, 2000: 5:13 a.m. ET
Germany's E.ON sells subsidiary for $2.35B in cash and assumed debt
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LONDON (CNNfn) - German utility E.ON, created by the merger of rivals Viag AG and Veba AG earlier this year, agreed Monday to sell its electronics unit to a European-U.S. consortium for about $2.35 billion ( 2.6 billion) in cash and assumed debt.
The consortium is made up of Schroder Ventures Funds, a European-based private equity firm, and two electronics components and computer products distributors in the United States, Arrow Electronics Inc. (ARW: Research, Estimates), of Melville, N.Y., and Phoenix, Ariz.-based Avnet Inc. (AVT: Research, Estimates). The deal comprises roughly $1 billion (1.1 billion) in cash plus $1.6 billion (1.76 billion) in debt.
Dusseldorf-based E.ON said the sale of the Veba electronics unit is part of its strategy to focus on its core energy and chemicals divisions. The Santa Clara, Calif.-based unit, which consists of the European and U.S. businesses Wyle, Memec , EBV Elektronic, Atlas Services and Raab Karcher, had sales of about $5.47 billion last year.
"We will use the considerable proceeds that the deal frees up from the electronics distribution business to fuel growth in our core areas," said E.ON Chairman and CEO Ulrich Hartmann.
In Frankfurt trading early Monday, E.ON [FSE: FEOA] shares lost 0.60 to 59.40.
Shares of Arrow Electronics slipped 3/16 to 34 in Friday trading in New York. Avnet stock lost 7/16 at 58-1/8 Friday.
The deal is expected to close in the next few months, pending regulatory approval. 
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