E.ON's position in central and eastern Europe is strengthening by the day. After getting approval to buy Slovakia's ZSE in April, the company will now take control of Hungary's second largest electricity distributor. The next stop for E.ON looks set to be Romania, as the major European utilities form increasingly powerful positions in the region.
German utility E.ON is buying out Electricite de France's 27.7% stake in Hungarian electricity distributor Edasz, via its wholly owned subsidiary E.ON Hungaria.
Edasz is the second-largest electricity distributor in the country, with 21-22% of the total electricity and heating market. The acquisition gives E.ON a 55.4% stake in Edasz, triggering a public bid for the entire company under Hungarian takeover rules. The offer of E73.56 per share is far below what EDF paid in 1995; the French company says it no longer wants to be a minority shareholder in Edasz.
E.ON now has a significant portion of the Hungarian power market, with majority stakes already in regional electricity distributors Dedasz and Titasz. Together with Austrian utility EVN, it also has a majority stake in Kogaz, a gas distributor. E.ON has a major presence in the rest of the central European power and gas market too - it has already been selected to take over power company ZSE in Slovakia, and is known to be interested in acquiring parts of the Romanian power distribution sector.
EDF is also keeping a finger in the pie. Although it has sold out of Edasz, it remains the majority shareholder in power distributor Demasz, and is looking to increase its presence in other central European markets, including Slovakia where is it the favorite to acquire SSE, one of the three regional power distributors up for sale.
The major utilities' appetites for central and eastern European distributors seem to be insatiable at the moment. E.ON, EDF and RWE are all forming increasingly powerful positions in the region.
Related research: Datamonitor, 2001: "Third party access and barriers to switching in European industrial and commercial energy supply"