Nuon
What is the purchase price?
What is the enterprise value, and why does it differ from the equity value?
Why is the equity value on closing different than previously presented?
How will Nuon Supervisory Board look like after the transaction?
What is the strategic rationale behind the transaction?
Which impact has the transaction on Vattenfall’s market position in Europe?
How is Nuon integrated into Vattenfall’s organisation?
How is the transaction funded?
What is the effective date of the transaction? When will Nuon be fully consolidated into Vattenfall’s accounts?
How will the German sales division of Nuon be divested?
How is the Nuon transaction structured?
Vattenfall AB (“Vattenfall”) will acquire 100% of N.V. Nuon Energy, which comprises all unbundled activities of Nuon where Vattenfall acquired 49% of the shares on 1 July 2009. The remaining 51% of shares will be acquired at a fixed price as follows: 15% in 2011, 15% in 2013 and the final 21% in 2015.
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What is the purchase price?
The equity value for 100% is EUR 9,863.5 million. The purchase price for the initial 49% is thus EUR 4,833 million. The shareholders of Nuon will receive fixed dividend payments during the co-shareholding period of six years.
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What is the enterprise value, and why does it differ from the equity value?
The bid by Vattenfall corresponds to an enterprise value of EUR 8,500 million. The equity value is however higher than the enterprise value due to a net cash position in Nuon.
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Why is the equity value on closing different than previously presented?
The equity value of the transaction is reduced due to that cash has been transferred from Nuon to the distribution company after Vattenfall submitted the bid.
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How will Nuon Supervisory Board look like after the transaction?
Vattenfall will have four out of eight members in the Nuon Supervisory Board. Vattenfall appoints the Chairman Lars G. Josefsson, who will have a casting vote. Vattenfall will thus have operational control of Nuon as of closing date despite the initial minority holding of 49%. Four members will be nominated by remaining Nuon shareholders, including two nominated by the Works Council.
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What is the strategic rationale behind the transaction?
The Netherlands is one of the most attractive regions for Vattenfall’s expansion and provides significant risk diversification for the Vattenfall group. For example, adding gas to Vattenfall’s generation portfolio provides a partial hedge to coal-fired operations in Germany.
Further, the combined entity of Nuon and Vattenfall with its strong technology platform is well positioned to become the leading European company in Making electricity clean. Vattenfall will strengthen its role in wind power and improve its position to shape regulatory discussions on energy efficiency, renewables and CCS.
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Which impact has the transaction on Vattenfall’s market position in Europe?
In addition to the existing market shares in the Nordic countries, Poland, Germany and UK; Vattenfall will gain presence in Belgium and the Netherlands. After the transaction, Vattenfall will be number one in Europe in Heat generation and off-shore wind capacity (number 8 on total wind capacity), number 5 in electricity generation and installed bio-mass capacity. The trading house will be among the Top 3 of Europe’s energy trading houses.
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How is Nuon integrated into Vattenfall’s organisation?
Nuon will form a third regional business group within Vattenfall, Business Group Benelux.
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How is the transaction funded?
Vattenfall submitted a bid with a fully committed financing in place through a EUR 5,000 million credit facility. The facility was however never used as Vattenfall successfully issued several Euro-denominated bonds during spring 2009 totalling EUR 4,050 million and a GBP 1,350 million sterling bond. Further, Vattenfall will carry out substantial divestments and has reduced capex plan from SEK 202 billion to SEK 191 billion.
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What is the effective date of the transaction? When will Nuon be fully consolidated into Vattenfall’s accounts?
The bid is based on the Locked Box closing method, which means that Vattenfall acquires the Nuon shares at a predetermined fixed price at closing date. Economic risk and reward are transferred to Vattenfall as of effective date 1 January 2009. However, according to IFRS rules, the accounts cannot be consolidated until Vattenfall has management control of the company, which occurs after closing. Thus the accounts will be consolidated as of 1 July 2009 when 49% of the shares are purchased and transferred.
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How will the German sales division of Nuon be divested?
The business unit Nuon Deutschland will continue to exist, offering the same products and services. Customers’ contract conditions will remain unchanged. The organisation will initially stay intact with the same employees. A different owner will be sought for the organisation.
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