Market of mergers and acquisitions rises over 300 times

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The local energy market recorded in H1 2008 mergers and acquisitions (M&A) that exceeded 1.5bn euro, over 300 times more than the total recorded in the similar period of 2008, according to a survey conducted by the Business Standard daily.
 
The director for energy and utilities within the Romanian-American Fund for Investments, Valeriu Binig, says this value, which may seem exaggeratedly bigger at the first sight, is based on 2 significant transactions: Enel, with Electrica Muntenia Sud and Petrom, with Petromservice. In rest, the transactions were quite small. According to him, the transactions will continue also in H2 of 2008, but at a more tempered pace, because part of the investors are expecting the results of the elections and the announcement of the new energy policies of the future government.
 
The CEO of the investment bank Raiffeisen Investment Romania, Ioana Filipescu, said this year’s transactions on the energy market may equal the record value registered in 2007 on this segment, after the sale of the oil group Rompetrol by the Kazakhstan’s state company KazMunaiGaz.
“Energy was a sector very well represented in M&A in H1 2008, in a context in which, in H1 2007, we had only two transactions totaling 4 million euro. The markets are in consolidation and acquisitions in the wind energy and LPG distribution sectors are also expected”, explained Ioana Filipescu.
 
In the energy sector, in H1 2008, some ten transactions were finalized, out of which some were signed in the previous years but which had their closing in 2008. Among them is the deal between the Italian energy giant Enel and Electrica, for Muntenia Sud. The value of the transaction stood at 820 million euro, based on a contract signed in 2006. Moreover, the list includes also the closing of the deal through which the biggest company in Romania, Petrom, bought important Petromservice assets for 328.5 million euro, based on an agreement signed in 2007.
 
This year, the biggest transaction on paper was the one through which the Czech energy group CEZ bought a wind project of 600 MW in Dobrogea (south-east) from Continental Wind Partners (CWP). The total of the acquisition plus the investments in the further development of the project to 600 MW take this business to the value of 1.1bn euro. Out of this sum, CWP will obtain effectively over 150 million euro. Also in the wind energy sector, the world’s biggest producer of wind energy, the Spanish company Iberdrola Renovables, bought 50 projects from Rokura Bucharest, in a transaction of 200 – 300 million euro.
 
On the market of gas distribution, the Czech investment fund PPF bought distributors Gaz Sud – for over 45 million euro – and Grup Dezvoltare Retele – for some 7 million euro. PPF is in negotiations for the takeover of other small distributors. Petrom is trying to sell Petrom Distributie Gaze and has remained in negotiations with the French at Distrigaz Sud, who have to improve their offer of approximately 10 million euro if they really want this company.
 
Moreover, Butan Gas bought the assets of three local distributors for some 8 million euro.
The US giant Weatherford bought in its turn Petrom assets – Base of Special Operations at Campina Derick, for some 10 million euro, and Atlas Gip, for 16.6 million euro. In the sector of electricity, Wienstrom GmbH Austria bought 17 micro water power plants from Hidroelectrica, for some 28 million euro.
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