Energy & Utilities Financial Deal Insights: Q4 2009

CATALYST 1
SUMMARY 1
ANALYSIS 2
TenneT purchases German power grid from E.ON, creating first "continental" TSO 2
Dutch state-owned electricity network operator and German utility agree price of €885 million plus year-end net financial position 2
Both TenneT and E.ON had a strong financial and strategic interest in this deal: E.ON is seeking to appease the EC and shore up its balance sheet while TenneT is emerging as NW Europe's major TSO 2
The deal will create Europe's first cross boarder transmission grid, spanning five different states 3
This acquisition reflects wider trends in Germany and Europe towards utilities focusing on generation activities abroad while disposing of transmission assets in home markets 3
Politics trumps business-sense as French consortium triumphs in bid for Areva T&D 4
French group Areva has selected a coalition of Schneider Electric and Alstom to acquire its transmission and distribution network 4
Despite the widespread criticism, the deal may just be the beginning for Areva in that it still needs further finance and could yet be forced into a complete merger with Alstom 5
Czech utility CEZ embarks on aggressive expansion program at home and abroad 6
Regulatory clearance allows utility to hedge against credit risks 6
The Czech utility subsequently made an offer for Vattenfall Europe's 21.28% stake in the German power distribution company ENSO 6
CEZ has also mooted interest in Enea, showing willingness to look beyond its boarders 7
CEZ is augmenting its generation strategy to tread a fine line between political and environmental pressure 7
SSE and National Grid emerge as rival bidders for EDF's South London DSO sale 8
EDF plans to sell its three UK electricity distribution networks 8
EDF's options narrow following OFGEM's statement that it would not allow returns on distribution networks in excess of 4%. 8
APPENDIX 10
Ask the analyst 10
Datamonitor consulting 10
Disclaimer 10