Utility Mergers in Europe

DealBook:

Consolidation in Europe’s energy sector ramped up yesterday, as two $31 billion deals loomed on the horizon. Dutch utilities Essent and Nuon unveiled an agreement to create a 24 billion euro ($31 billion) energy giant that will rank among Europe’s top 10. The new company, to be called EssentNuon, will have 12 billion euros in sales and have a 20,000-strong work force in the Netherlands, Belgium and Germany and supply 5 million customers. Both firms are owned by local governments, and ownership of the new entity will be split 55 percent to 45 percent in Essent’s favor.

The deal was announced the same day that another megadeal in the European energy sector appeared closer to completion. Spain’s Gas Natural said yesterday it was dropping its 24 billion euro ($31 billion) offer for rival Endesa, clearing the way for Germany’s E.ON to buy the Spanish energy utility.