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Veba, Viag results diverge
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February 10, 2000: 7:34 a.m. ET
Veba earnings up, Viag down; German utilities aim for merger clearance in May
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LONDON (CNNfn) - German merger partners Veba and Viag reported contrasting earnings Thursday, but reiterated that their merger plan to create Europe's largest utility company remained on track.
Duesseldorf-based Veba reported a 63 percent rise in preliminary pretax earnings for 1999 to 3.9 billion euros ($3.86 billion) from 2.4 billion euros a year earlier. The result was boosted by asset sales ahead of the planned merger, first agreed to last September.
Munich-based Viag said its preliminary pretax earnings fell 23 percent to 2.6 billion deutschemarks ($1.32 billion).
Veba, the larger of the two companies, said it expected European competition authorities to complete their probe into the merger plan in May, and did not expect it to uncover any serious competition issues.
Both companies have been hit by the deregulation of the German electricity sector that has slashed margins as new competitors have entered the sector. The two companies are being required to open their transmission networks to secure regulatory approval.
Veba (FVEB) shares climbed 2 percent to 42.8 euros in Thursday midday trading, but remain down by a third from their 52-week high. Viag (FVIA) stock gained almost 1 percent to 17.25 euros, but is 22 below its 52-week peak.
Veba said that it had achieved record earnings at an operating level, up 16 percent to 2.3 billion euros. The company has already sold a host of telecom and TV assets, including Cablecom, the largest Swiss cable TV operator.
Viag said sales fell 23 percent last year to 19.43 billion euros, though they fell just 3 percent when taking disposals into account.
Both companies are due to report final 1999 earnings on Apr. 14, and aim to complete their merger by mid-2000. The company will be the third-largest European power operator after Electricité de France and Italy's ENI, with pro forma 1998 sales of $30 billion.
Veba shareholders will hold 66.5 percent of the merged company's stock. 
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Veba
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