E.ON to sell US Power and Gas Business to PPL Corporation

With this disposal E.ON has already surpassed its target to realize at least 10 billion Euro from the divestment of assets by the end of 2010. The transaction is subject to the approval of U.S. cartel and regulatory bodies. E.ON US will be treated as discontinued operations for the whole of 2010. This technically reduces Adjusted EBIT by approximately 400 million Euro and Adjusted Net Income by approximately 260 million Euro, but has no effect on net income attributable to shareholders. Accordingly there is also no change to the 2010 Adjusted EBIT and Adjusted Net Income outlook on a pro-forma basis. As part of the transaction, E.ON will record a goodwill impairment of approximately 0.9 billion Euro in the first quarter of 2010. This figure is based on the not finally ascertained and approved interim financial statement and might therefore be subject to change.
Wulf H. Bernotat, CEO of E.ON, said: “With this transaction we divest a strong and solid business. However, E.ON US no longer provided us with much room for further strategic development. With PPL as new owner our employees in Kentucky gain a new and strong partner for the future. E.ON on the other hand wins more clarity in our portfolio and valuable room for organic growth.”
E.ON purchased Louisville Gas and Electric Company (LG&E) and Kentucky Utilities Company (KU) - together forming the core business of E.ON US LLC - as part of the takeover of UK based Powergen in 2002. E.ON US LLC, also known as Market Unit US-Midwest, primarily operates in the regulated energy market in Kentucky. Together, LG&E and KU have a significant generation portfolio in Kentucky and supply 940,000 customers with electricity and about 321,000 with natural gas. In 2009 E.ON US LLC delivered 32.4 billion kilowatt hours of power and 12.6 billion kilowatt hours natural gas. The company employs approximately 3,100 employees, has a turnover of 1.8 billion Euro and an Adjusted EBIT of 384 million Euro. The renewable energy business in the US is not affected by the transaction. These operations are organized under E.ON Climate & Renewables, North America.