£4bn sale of Central Networks by E.ON is welcomed

THE union representing hundreds of workers at Midland based utility Central Networks has welcomed the decision by E.ON to sell the business.

E.ON announced earlier this month its intention to sell Central Networks – which evolved out of the former Midlands Electricity – to US corporation PLL in a deal worth £4bn.

Kevin Coyne, Unite national officer for energy, said: “Central Networks has been bought by a company which has a genuine and long term interest in electricity distribution rather than a venture capital consortium out to make a fast buck.

“We look forward to meeting with the new owners with a view to representing our members’ interests who hold the key to continuing to make this company a success.”

The acquisition will see PPL, which already owns Western Power Distribution, become the largest low-voltage network owner in the UK.

FA Cup sponsor E.ON originally acquired Central Networks East as part of its takeover of Powergen in 2002. It added Midlands Electricity in 2004 in a £1.2bn acquisition, rebranding the operation Central Networks West.

Central Networks is the UK’s second largest electricity distributor, maintaining a network of overhead and underground power cables that supply five million homes and businesses in the Midlands.

E.ON chief executive Johannes Teyssen said: “Central Networks is a consistently high performing distribution business. However after nine years of full ownership, the business offers E.ON value enhancement opportunities and, due to the strict regulation, there is no possibility to leverage synergies with other E.ON businesses in the UK.

“The purchase price represents excellent value for E.ON and the proceeds will be a key contribution towards our €15bn divestment target by the end of 2013. The proceeds of the sale will increase E.ON’s financial flexibility and strengthen our balance sheet.”

E.ON UK, chief executive, Paul Golby said PPL was an excellent partner for Central Networks as it shared the firm’s goal of providing a safe and reliable service for our customers and our communities.

“As we look to finalise the transaction, we will work closely with PPL, our trades unions and representatives to set a successful course for the future of the combined company and its employees,” he said.