Essen, 17 September 2004
RWE Initiates Disposal of Waste Management Activities (Ad hoc)
- RETHMANN acquires 70% of RWE Umwelt’s business volume
RWE AG in Essen has initiated the withdrawal from its waste-management business announced last February. In the first step in this process, RETHMANN AG & Co. KG will acquire RWE Umwelt and 70% of RWE Umwelt's total business volume. Selected areas of RWE Umwelt, which constitute 30% of the total revenues of the waste-management business, will remain with RWE AG for the time being due to anti-trust restrictions. These activities are expected to be divested in the coming three years.
RWE will sign a purchase agreement with RETHMANN shortly. The transaction will then be contingent upon approval by the German Federal Cartel Office.
The withdrawal from the waste-management business is part of RWE's strategy to clearly focus on the core business areas of electricity, gas and water.
Harry Roels, CEO of RWE AG, described RETHMANN as a strategic buyer with proven expertise in the waste-management business, one that will further strengthen and expand RWE Umwelt's established market position. "What we were striving to do, in the interests of the employees, customers and business partners of RWE Umwelt, was to keep significant parts of the business together as a whole under a new roof. In terms of our goals, we have found an optimal transaction structure, particularly in light of anti-trust restrictions. Thus, the waste management business gains a stable perspective for the future. With today's decision, along with the sales of Hochtief and Heidelberger Druckmaschinen, we are fulfilling our expressed goal of becoming a clearly focused and strong player in the energy and water businesses.”
The transaction is comprised of two parts:
By acquiring RWE Umwelt AG, RETHMANN will take over the business activities in the German regions North (excluding Mecklenburg-Western Pomerania), Rhine-Ruhr, Rhineland, South, Southwest (excluding Hesse), and selected areas of the Eastern region, as well as RWE Umwelt's shareholding portfolio including Buchen UmweltService GmbH, the supra-regional special waste-disposal units, as well as RWE Umwelt AG’s headquarters in Viersen, including all associated obligations. This represents 70% of RWE Umwelt's existing business volume. At the same time, the subsidiaries and minority stakes in municipal waste-disposal companies (so-called public private partnerships) that remain with RWE are to be separated from RWE Umwelt. As a result, RWE will, among other things, maintain 50% of the RWE Umwelt’s residential waste contracts. RWE will handle these remaining RWE Umwelt activities as non-core business with the goal of divesting them within the coming three years.
The transaction is based on an enterprise value for the entire RWE Umwelt Group of about €0.8 billion as of January 1, 2005. On the basis of the forecast EBITDA for fiscal year 2004, this would result in a multiple of over 4. About two thirds of the enterprise value is attributable to the portion to be acquired by RETHMANN. Including RWE Umwelt’s international businesses already divested in 2003 and 2004, the pro-forma enterprise value for the entire waste-management division amounts to about €1 billion.
The sale of RWE’s entire waste management activities will reduce the Group's net debt by some €0.4 billion. About €0.2 billion will be saved upon closing of the transaction, which is expected to take place at the latest in the first quarter of 2005. Earnings forecast for 2004 remains unchanged for the RWE Group.
Please contact our Investor Relations Team with any questions that you may have:
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