German utility E.ON close to selling Spanish operations for $3.1 bn

E.ON SE, Germany's biggest utility, is close to selling its Spanish operations to Australian infrastructure investor Macquarie Group Ltd and a unit of Kuwait sovereign wealth fund, for €2.5 billion ($3.1 billion), The Wall Street Journal Deutschland yesterday reported, citing people familiar with the matter.

E.ON's board is to meet today to approve the deal, which includes debt, the report said.

Under the terms of the deal, Macquarie would hold 60 per cent of the Spanish operations, while the rest would be held by Wren House Infrastructure Management, a part of the Kuwait Investment Authority.

Macquarie plans to split the acquisition into two companies, one comprising its regulated assets and the other its unregulated assets and each would have independent financing, the report added.

E.ON had acquired the power plants and energy-distribution assets in Spain, Italy and France in 2007 for €11.5 billion, and has since written down the value of those assets by €1.5 billion.

E.ON is expected to use the proceeds from the sale to cut its €31 billion.

E.ON is Germany's biggest utility and facilities across Europe, Russia, and North America, employing more than 62,000 people.

The Düsseldorf-based company supplies power to around 35 million customers and had sales of €122.5 billion in 2013.