E.ON aquires a substantial interest in Ruhrgas and brings Veba Oel into promising partnership with BP

E.ON AG, Düsseldorf, and BP plc, London, have agreed to reorganize their oil and gas activities in Germany.

In the course of a capital increase at the turn of the years 2001/2002, E.ON will acquire a stake of 51% in BP subsidiary Gelsenberg AG, which holds 25,5% of Ruhrgas AG. In a second step, BP will have the option as of January 2002 to sell the remaining 49% of Gelsenberg to E.ON.

At the same time, BP will acquire a stake of 51% in Veba Oel AG, Gelsenkirchen - also by way of capital increase at the turn of the year. As part of the capital increase BP will redeem the shareholder loans granted by E.ON of approximately 1.9 billion euros. E.ON will be able to exercise a put option as of April 2002 to sell the remaining 49% of Veba Oel.

When both sides exercise their put options E.ON will have received 25,5% of Ruhrgas, a cash balance of Euro 400 million plus adjustments and repayment of shareholder loans of approximately 1.9 billion euros. On the basis of a value of 2.4 billion euros for the Ruhrgas stake the equity value of Veba Oel is 2.8 billion euros. Therefore, with repayment of shareholder loans and assumption of financial debt and of pension liabilities by BP, E.ON achieves an enterprise value of approximately 6.5 billion euros for Veba Oel.

Both transactions are still subject to approval by the anti-trust authorities.