Southern Company agrees to acquire stake in Bewag

Southern Company, through its Southern Energy Inc. subsidiary, has agreed to buy 25 percent of Berlin’s electric utility, Berliner Kraft und Licht AG, for approximately $830 million cash.

Southern Company has formed a consortium with two leading German utilities, PreussenElektra and Bayernwerk. The consortium will control 75 percent of the Berlin utility, known commonly as Bewag. The deal is subject to approval by Berlin’s parliament and European regulators.

“This acquisition from the start will enhance earnings for Southern Company shareholders,” said A.W. Dahlberg, Southern Company’s chairman, president and chief executive officer. “Bewag is a vertically integrated electric utility with a premier distribution system and access to high-voltage transmission lines connecting to other parts of Europe. It offers us an opportunity to capture growth in the world’s second-largest integrated utility market. We see the same prospects for profitable ventures in continental Europe that we find now in the United States: energy marketing and trading, low-cost generation, efficient distribution and enhanced energy services to customers.”

The Bewag stake became available after the city of Berlin decided to sell its 50.8 percent share of the company. That 50.8 percent, combined with shares of Bewag controlled by PreussenElektra and Bayernwerk, makes it possible for the three partners to each hold 25 percent of Bewag.

PreussenElektra is owned by Veba, and Bayernwerk is owned by Viag. Both parent companies have numerous non-electric holdings, such as chemicals, real estate and telecommunications.

“This is by far the most significant investment undertaken by an American company in continental Europe’s electric utility industry,” Dahlberg said. “It’s an added benefit that our new partners are two of the most forward-looking utilities in Europe.”

Southern Company (NYSE: SO), the largest producer of electricity in the United States, is the parent firm of Alabama Power, Georgia Power, Gulf Power, Mississippi Power and Savannah Electric. Based in Atlanta, Southern Company supplies electricity in eight countries on four continents and provides energy-related marketing, trading and technical services and wireless telecommunications. Southern Company’s common stock is one of the 20 most widely held corporate stocks in America.

Southern Energy Inc., a unit of Southern Company, develops, builds, owns and operates power production and delivery facilities and provides a broad range of services to utilities and industrial companies around the world.