Power Engineering - E.ON buys Airtricity wind unit for $1.4bn

6 October 2007 - E.ON is continuing to expand its renewables business and is acquiring the North American activities of Irish wind farm operator Airtricity for $1.4 billion. This takeover marks the first time E.ON has attained a strong renewables market position with considerable growth potential outside of Europe.

Airtricity is currently operating wind farms with around 210 MW installed capacity. Additional 880 MW are going to be operational by the end of 2008. Wind farms already operational or under construction are situated in extremely favorable locations in the US states of Texas and New York and boast superb load factors. More than 1000 MW of additional projects are in an advanced development stage. These projects are going to require an investment volume of around $3.5bn until 2011. Other projects across US and Canada totaling more than 5000 MW are in an early development stage.

Lutz Feldmann, responsible for renewables on the E.ON board: "The acquisition of Airtricity in North America marks our entry into the world's most attractive renewables market. It is a further step towards establishing a leading international position in the renewables business. The large number of Airtricity projects is also offering additional growth potential. Only weeks after buying Energi E2 Renovables Ibéricas in Spain and Portugal, our efforts to expand our renewables activities are progressing swiftly with this acquisition. Continuity is our prime concern for the integration of Airtricity North America into the E.ON Group, which is why we will continue to rely on the company's management under the leadership of the CEO Declan Flanagan."

By acquiring Airtricity North America E.ON is increasing its worldwide installed wind power capacity from around 640 MW to 850 MW, making it one of the largest wind farm operators worldwide. The total capacity of the wind power projects being developed is increasing from 2.6 to 4.6 GW. With this acquisition, E.ON is diversifying its regional and technological wind power portfolio. The growing business volume also means that the Group can tap economies of scale, including in the purchase of wind turbines.

The transaction is subject to certain approvals (e.g. regulatory) in the US and is expected to close by the end of this year

The US wind energy market is one of the most attractive worldwide. According to Ernst & Young's "Renewable Energy Country Attractiveness Indices", it scores 72, which is the highest score, followed by India, Spain and the UK, which score 64 each. Given the extension of government funding and the introduction of renewables guidelines at state level, the US wind energy market is going to be generating growth rates in excess of 10 per cent annually expected over the next ten years.

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