FRANKFURT (Reuters) - Cash-rich E.ON
Europe’s biggest listed utility is diversifying its gas sources, which are now mainly Russian, and seeking to improve its gas supply in Britain, where a shortage of gas is expected.
Caledonia, with interests in 15 gas fields in the UK part of the southern North Sea, is controlled by a group of investors led by energy-focused private equity firm First Reserve.
"The acquisition of Caledonia brings us significantly closer to our goal of covering up to 15-20 percent of the gas needs of E.ON Ruhrgas from our own production in the long run," E.ON Chief Executive Wulf Bernotat said in a statement.
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Bernotat said the acquisition, which still has to be cleared by UK authorities, meets E.ON’s stringent investment criteria.
E.ON’s criteria say any acquisition should be a strategic fit, enhance earnings in the first full year and provide returns that exceed the cost of capital within three years.
Analysts estimated E.ON had a cash hoard of more than 20 billion euros, by far exceeding its financial debt, thanks partly to recent asset sales.
E.ON has built a significant market position in the United Kingdom after its 15 billion-euro purchase of Powergen in 2002 and its 2003 buy of Midlands Electricity for 1.6 billion euros.
E.ON said early this month it was considering a cash offer for Scottish Power, Britain’s fifth-biggest energy supplier.
E.ON shares rose 2.3 percent to 77.67 at 0801 GMT, while the blue-chip DAX index <.GDAXI> was up 1.8 percent.
