Japanese consortium reaches agreement to acquire Eneco Groep
In the Netherlands, power and gas utility Eneco Groep N.V and a consortium of Mitsubishi Corporation and Chubu Electric Power Co., Inc. (Chubu), have announced that they have reached an agreement on the sale of all shares in Eneco to the consortium for a total value of EUR 4.1 billion. The transaction is subject to the approval of the relevant authorities, including the Dutch minister of Economic Affairs and Climate Policy.
According to a statement on November 25, 2019, the Consortium has made the “best offer” for the shareholders and all other stakeholders of Eneco, including its employees, with the best terms and conditions, including price, and deal certainty. In the upcoming period, the 44 municipal shareholders will be given the opportunity to take a final decision on the sale of their shares.
We are impressed by Eneco’s achievements and its market position and intend to further build on that position. Eneco and we have been successfully working together since 2012 in a long-term strategic partnership and as a result have a proven track record of successful collaboration on various renewable energy projects. We share the same long-term vision of “Everyone’s sustainable energy”, have a good cultural fit and we firmly believe that Eneco is well-positioned to continue to play a leading role in the energy transition. Eneco fits in perfectly with our current energy activities and provides us with a platform to further grow in the European market in which we intend to have a leading position in the energy transition. We strongly believe that we are the best partner for all stakeholders of Eneco and look forward to jointly further develop a sustainable strategy, said Takehiko Kakiuchi, CEO of Mitsubishi Corporation.
The transaction is subject to the approval of the relevant authorities, including the Dutch minister of Economic Affairs and Climate Policy.
With the consortium of Mitsubishi Corporation and Chubu we have found shareholders that support Eneco’s strategy for a hundred percent. Our partner for several years, Mitsubishi Corporation, will now become our largest shareholder. And, equally important: Eneco will remain intact as an integrated and independent Dutch energy company. We will receive ample opportunities for expansion both inside and outside Europe. I am proud that the shareholders’ committee, supervisory board and board of management have jointly and in unanimity reached this positive result. At least as important is that the central works council also has a positive view on Mitsubishi Corporation and Chubu as future shareholders and has rendered an unconditional positive advice. We are looking forward to continuing to work on the energy transition and a sustainable future, together with our customers, employees, partners, governments and new shareholders, said Ruud Sondag, CEO of Eneco.
With the Consortium, Eneco is able to further expand on the execution of its sustainable strategy, aimed at the growth of sustainable energy assets, energy supply, and innovative services. Both by way of autonomous growth as well as acquisitions.
Eneco will become the centre of all energy-related activities of Mitsubishi Corporation in Europe. Mitsubishi Corporation intends to transfer part of its offshore wind activities to Eneco, in total more than 400 MW. Through Mitsubishi Corporation, Eneco will get access to new offshore wind markets in the United States (US) and Japan.
Vice versa, Mitsubishi Corporation, and Chubu will obtain insight and experience in improving the sustainability of the energy supply in their home markets. Between mid-2019 and mid-2024, Eneco will have invested at least EUR 1 billion in renewable generation assets in the Netherlands, Germany, and Belgium.
Eneco remains intact as an independently operating Dutch energy company and will remain an independently operating energy company with the consortium as its shareholders, through a newly formed entity, under the direction of the current board of management, supplemented by Hans Peters, Chief Customer Officer (COO) with Eneco, and a Mitsubishi Corporation representative (to be announced).
The head office will remain in Rotterdam. The operations in Belgium and Germany will be continued from their regional head offices. Employment conditions will remain unchanged, employees retain their employment terms and can tap into new career opportunities, both in the Netherlands and internationally.
The Consortium intends to organically grow the company also improving employment opportunities both for existing and prospective employees. Eneco’s credit profile is expected to benefit from the financial strength of the new shareholders and from the acquisition structure without third party debt.
Mitsubishi Corporation has committed an intercompany loan of EUR 1 billion to Eneco which it can draw upon at its discretion and at favourable terms to fund long-term investments.
Several market players have shown great interest in Eneco, which confirms the unique position Eneco holds in the energy transition. Our priority was to conduct a diligent sale process, with consideration for Eneco’s sustainable strategy and other interests of all stakeholders of Eneco. We are therefore pleased that, in unanimity with the board of management and the supervisory board, we have found stable shareholders in Mitsubishi Corporation and Chubu for Eneco that share Eneco’s sustainable goals and ambitions. The consortium has offered the best terms and conditions on all levels and meets all criteria that were set in the sale process in the best way. The consortium has the required financial strength to further build Eneco, both in light of the energy transition as well as commercially. In the upcoming period, we will further explain the proposed transaction to Eneco’s 44 shareholders, said Arjan van Gils, alderman responsible for finance in the municipality of Rotterdam and chairman of the shareholders’ committee.