Utility News

The Wall Street Journal (subscription):

With more than $100 billion in deals proposed in the past two years, Europe’s giant utilities have one of the world’s biggest cases of merger mania. Just yesterday two European companies culminated a messy battle and agreed to a $58.27 billion bid for Spain’s Endesa SA.

Behind all the deals is a big collision between Europe’s new push for a unified marketplace and the national pride of Europe’s politicians. Starting July 1, the European Union’s power sector will be officially flung open to competition, allowing utility companies from any of the bloc’s 27 member nations to sell electricity in any other.

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Forbes:

Following months of speculation, the world’s largest natural gas producers are expected to announce the formation of a cartel when they gather in Doha, Qatar, next week for a meeting of the Gas Exporting Countries Forum, an informal collective of 14 gas-rich nations.

No one is certain what the new organization will try to achieve, but experts here say it will not be able to set prices like the oil cartel, the Organization of Petroleum Exporting Countries. It will also not have a significant impact on natural gas prices or production in the United States, they add.

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Central Pennsylvania Business Journal:

Allentown-based PPL Corp. said it will sell its three electric utilities in Latin America in an auction process that would take several months.

The utilities, in Chile, El Salvador and Bolivia, account for about 5 percent of PPL’s earnings, according to a company news release. Sale proceeds could be used to buy back stock, pay down debt or reinvest in other businesses, the company said.

PPL said it has no intention of selling its utilities in Pennsylvania or the United Kingdom.

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Reuters via the New York Times:

Enel, an Italian utility, said it had bought a 10 percent stake in Endesa, the Spanish utility, for 4.1 billion euros ($5.4 billion), possibly breaking up an attempt by a German company, E.On, to buy Endesa. Enel, based in Rome, said it had acquired 9.99 percent of Endesa at 39 euros a share, above E.On’s bid of 38.75 euros and Endesa’s closing price of 38.12 euros. E.On raised its offer for Endesa this month to 41 billion euros ($54.2 billion) and emerged as the leading bidder, ahead of Gas Natural of Spain. It has cleared a number of legal hurdles in a bidding war that has lasted more than a year. Analysts said another bidder, Acciona, also of Spain, might revive its interest in Endesa as a result of Enel’s action.

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