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Mergers and acquisitions with the European Power and Gas Sectors

January 2008

CERNA - Mines ParisTech

Report written with R. Montorus.

This report surveys 247 M&A deals between energy companies in the European Union from January 1998 to December 2007. Part I describes cases and Part II analyzes patterns. Cases involve industrial companies with businesses along the power and/or gas value chain in Europe. The value of the deals reported hereinafter was above Eur 100 million. Deals which were proposed but were not effectively to be implemented have not been considered. Our main sources of information can be found in: (1) decisions published by competition authorities, especially by the European Commission; (2) PwC’s Power Deals annual reports; (3) international press (Lexis Nexis); (4) chronicles, annual reports and press releases of energy companies; (5) and sectorial press such as Power in Europe and Enerpresse.

The deals that have been taken into account in this report comply with the following criteria: (1) parties had businesses along the power and/or gas value chain within Europe; (2) the deal was effectively to be implemented. Acquisitions by financial firms (e.g. private equity companies), cases involving pure oil companies, small acquisitions, forbidden deals (e.g. EdP/GdP) or not-implemented concentrations have not been considered. Deals whose values are unknown have been reported if reasons exist for expecting them to be large, for instance if they have been assessed by the European Commission. In this report, the bidder company is the one that purchases the target company; when roles were not clearly defined, the largest party was considered as the bidder. The year of the deal was defined as the year of effective concentration. The values of the deal include all liabilities and debt which were assumed by the bidder.

Special criteria were defined in order to tackle special cases for the patterns analysis in Part II. In case of multi-step concentrations (i.e. when the bidder acquired control of the target via more than one acquisition), only the largest step was considered. In case of joint ventures, one deal was considered for each of the bidder parties, and the value of the joint acquisition was equally split up between the bidder parties.

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