05/11/2004

E.ON will buy majority stake in gas business of Hungarian MOL

FRANKFURT - German energy industry company E.ON, which also operates in the Czech Republic, will buy a majority stake in the gas business of Hungarian energy industry group MOL. The company anounced it this night, reporting tha the total value of the transaction could reach € 2.1 billion.

According to the agreement, Ruhrgas, the gas industry subsidiary of E.ON, will buy a 75 percent stake in MOL's gas trading and storage units and a 50 percent stake in the gas importing unit. However, the contract between E.ON and MOL is yet to be approved by the respective anti-monopoly offices.

E.ON general director Wulf Bernotat considers the acquisition an ideal step towards the growth of the company in Eastern Europe. "Hungary plays an important strategic role as the gas industry hub of the region, since demand for gas in Hungary and the neighboring countries will increase substantially," he said. He added that in Hungary the growth is expected to be driven by demand from power plants, reports Reuters.

In the Czech Republic, E.ON controls Jihomoravská and Jihočeská energetika and E.ON Czech Holding, which holds 16 percent in gas distributor Východočeská plynárenská. JME and JČE serve 1.4 million customers to whom they supply 12 billion KWh of electricity per year. They control about 24 percent of the Czech market.

Source: Czech News Agency (ČTK)