Shanghai Electric in ‘Initial Contact’ for EON AssetsBloomberg News
Shanghai Electric Power Co. said it was in “initial contact” with Germany’s largest utility EON SE to buy its Italian coal electricity assets for about 150 million euros ($185 million).
“We haven’t started due diligence and haven’t started initial negotiations,” the Shanghai-based company said today in an exchange filing. Shanghai Electric Power is in preliminary contact with EON to purchase its Italian assets, Reuters reported yesterday citing an official at the Chinese company it didn’t identify.
Shanghai Electric Power is expanding overseas, including in Japan, Australia and Iraq, to boost revenue amid rising competition at home from rivals such as China Huaneng Group and China Huadian Group. The company “aims to create another Shanghai Electric Power overseas” by 2020, it said in the statement.
EON will spin off fossil-fuel power plants to focus on renewable energy, Chief Executive Officer Johannes Teyssen said Dec. 1 in Dusseldorf. The company has six binding bids for its Italian assets, Boersen-Zeitung reported last month. Shanghai Electric Power wasn’t part of the bidding, the newspaper said.
EON shares gained as much as 0.6 percent to 15.14 euros and traded at that price as of 1:56 p.m. in Frankfurt.
Net income at Shanghai Electric Power climbed 33 percent to 1.18 billion yuan ($192 million) in 2013 as sales rose 0.5 percent to 15 billion yuan, it said on March 24. The shares gained 1 percent to close at 7 yuan yesterday in Shanghai. The stock was suspended from trading today pending an announcement.
(An earlier version corrected the status of due diligence.)
— With assistance by Helen Yuan