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Reliant goes Dutch
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March 10, 1999: 10:28 a.m. ET
U.S. energy group will pay $2.4B by end of 2006 to acquire UNA
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LONDON (CNNfn) - U.S. utility giant Reliant Energy announced a multi-billion dollar plan Wednesday to gain "a unique entry point into Europe" by acquiring one of the Netherlands' largest power companies by the end of 2006.
Houston, Texas-based Reliant, a diversified global energy company with assets totaling more than $19 billion, said it intended to pay an initial $900 million for a 40 percent interest in Dutch power generating firm N.V. Energieproduktiebedrijf UNA.
Reliant said it would increase its holdings to a majority stake by 2002, and purchase the remaining shares in UNA by the end of 2006.
Over the seven-year period, Reliant will pay around $2.4 billion for the Dutch firm.
The transaction is subject to advice from UNA's work council and Dutch regulatory approval, among other conditions. The deal is expected to close in June 1999.
Amsterdam-based UNA is the first Dutch electricity company to be privatized according to The Wall Street Journal.
The purchase will mark Reliant's first major deal in Europe after merger talks with U.K. group PowerGen (PWG) fell through last year, according to the Journal.
Reliant never formally commented on the PowerGen talks - or even acknowledged that they had taken place - calling them the product of market rumor.
Spokeswoman Sandy Fruhman confirmed Wednesday that Reliant (REI) had prevailed over bids from several other major international energy groups for control of UNA, which generates some 20 percent of the electricity used in the Netherlands. Those companies included Texas Utilities, Edison International, and a U.K.-based company.
Reliant said Wednesday its partnership with UNA is intended to be Reliant's exclusive investment vehicle throughout Europe. The two companies will share day-to-day management responsibilities.
"Europe is the most important region outside the U.S. that offers the combination of deregulating power and gas markets and strong commercial, political and legal infrastructure," Steve Letbetter, Reliant's president and chief operating officer said in a statement.
Letbetter added: "UNA is a leading power generator in the Netherlands and offers a unique entry point into Europe."
Reliant, with $11.5 billion in annual revenues, has a generating capacity of nearly 18,000 megawatts, with an additional 1,900 megawatts of projects under construction or development.
The group's three natural gas utilities and single electrical utility serve almost 4 million customers in six states. It is the fourth largest electric and natural gas utility in the U.S., and also owns stakes in international electric utilities serving 9.5 million customers in Latin America.
UNA, one of four large Dutch generators, operates gas, coal and co-generation plants in the Amsterdam and Utrecht areas.
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Reliant Energy
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