Wren House and Macquarie fund acquire Eon assets in Spain and Portugal

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Wren House and Macquarie fund acquire Eon assets in Spain and Portugal

E.ON has agreed to sell all of its Spanish and Portuguese businesses to Macquarie European Infrastructure Fund IV (Macquarie Infrastructure and Real Assets) and Wren House Infrastructure.

The assets have been sold for an enterprise value of €2.5 billion (US$3.11 billion).

E.ON has found a professional new owner for its activities with an impressive track record in the energy business. The buyer will take over all of E.ON's activities in Spain and Portugal and is committed to the long-term future of the businesses.

The activities that will be sold include all Spanish and Portuguese businesses of E.ON including 650,000 electricity and gas customers and 32,000 kilometers of electricity distribution network. In addition, the activities include a total generation capacity of four gigawatt that come from coal, gas, and renewable sources in Spain and Portugal. The total number of employees is approximately 1,200.

The transaction is subject to the approval of the European Union competition authority. The transaction is expected to close in the first quarter of 2015. In addition, Wren House Infrastructure will then become a minority investor in E.ON's Iberian businesses alongside the Macquarie Fund.

E.ON CEO Johannes Teyssen said:

"Our activities in Spain are high performing assets with a climate-friendly and diversified generation fleet and high quality electricity distribution network. The proceeds of the sale will increase E.ON's financial flexibility and strengthen our balance sheet. I want to take this opportunity to thank all our employees in Spain for the excellent work they have done as part of E.ON and as we look to finalize the transaction, we will work closely with the new owner, our trade unions and representatives to set a successful course for the future of the company and its employees."

Edward Beckley, European Head of Macquarie Infrastructure and Real Assets:

"We are delighted to be investing in this diverse and high quality portfolio of energy assets, at a time where greater certainty has been provided for the regulatory regime and economic prospects are improving. As a long term investor we look forward to supporting the management team in developing these businesses for the benefit of the communities they serve."

Although there is no formal information about the the bidders, according to different sources, the following companies were interested in the assets at some point: Spain's Grupo Villar Mir, Endesa, Gas Natural, Acciona, Portuguese utility Energias de Portugal (EDP), Borealis InfrastructureKKR, Riverstone, BrookfieldBlackstoneJP Morgan Infrastructure Investments and Alpiq.

This is MEIF IV's sixth investment, and follows on from its earlier energy and renewables investments in Sorgenia Green (Renewables: Italy and France), Open Grid Europe (Gas transmission network operator: Germany) and Czech Gas Networks (Gas distribution network: Czech Republic).

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