TAURON purchased GZE from Vattenfall

TAURON Polska Energia signed, on 13 December, the final agreement regarding the acquisition of 99.98% shares in Górnośląski Zakład Elektroenergetyczy (GZE) from Vattenfall AB. In consequence of the transaction TAURON strengthened its position of the leader in electricity distribution in Poland and became the leader in sales. The Group will deliver electricity to 5.1 million customers and will become a holding entity with PLN 18.6 billion in revenues and an EBITDA at the level of PLN 3.2 billion (based on 2010 results).

‘The agreement closes a nine-month period of intensive work on the acquisition of GZE, a company that is very important from the point of view of our Group. Thanks to the acquisition we will not only obtain a distribution network focused on a relatively small area and over 1 million customers, but also restructured entities of high corporate standards’, said Dariusz Lubera, the President of the management board of TAURON Polska Energia. ‘We readily embraced the opportunity of acquiring GZE. Financial analyses which indicate the synergy effects, confirm that we made a good deal.’

TAURON anticipates synergies in distribution and supply, among others. Financial benefits are expected both, on the side of revenues and costs. Additionally, the Group may count on financial benefits in investments. The Company believes, inter alia, that its gross sales will increase and that it could count on greater loyalty of its customers. The benefits on the side of revenues are planned mostly in the supply segment. As far as cots are concerned, the expected benefits relate mostly to energy trading costs, marketing and economies of scale. The value of the synergies is estimated at PLN 150 million in 2012-2016.

Additional, so-called ‘inherent synergies’ are also important, namely the probable benefits of GZE acquisition. Their value has been estimated by the advisor in the due diligence process at approximately PLN 254 million between 2012-2016.

‘The structure of financing this transactions is, in our opinion, advantageous and secure. We are using relatively few of our own resources while using financing provided by bonds which are a very flexible instrument. At the same time we also maintain a very safe level of debt’, commented Krzysztof Zawadzki, Vice President of the management board, CFO of TAURON Polska Energia.

The transaction will be finalised using our own resources and the proceeds from the bonds. The bonds were subscribed for by leading financial institutions: Bank Handlowy w Warszawie S.A., ING Bank Śląski S.A., Bank Polska Kasa Opieki S.A., BRE Bank SA, Powszechna Kasa Oszczędności Bank Polski S.A. and Nordea Bank Polska S.A., and Nordea Bank AB.

The total transaction value amounts to PLN 4.62 billion. TAURON will pay Vattenfall PLN 3.62 billion and the remaining amount, approximately PLN 1 billion is the debt owed by Vattenfall to the GZE group companies which, in result of the transaction, will be taken over by TAURON.

Under the transaction TAURON will assume direct control over Górnośląski Zakład Elektroenergetyczny and indirect control over the subsidiaries: Vattenfall Distribution Poland, Vattenfall Generation Poland, Vattenfall Sales Poland, Vattenfall Network Services Poland, Vattenfall Wolin-North and Vattenfall Business Services Poland.

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