Germany's Largest Utility Focuses on Grids to Attract Pensions

(November 15, 2010) — E.ON AG is likely shifting its focus on selling power grids in a $20 billion sale to lure funds.

According to Bloomberg, E.ON aims to grow outside of Europe where utilities face stalled demand and levies from governments aiming to close deficits. It will divest $20 billion of assets in order to attract pension funds looking for steady, inflation-protected returns electricity lines offer, the news service revealed.

“Grids need a high level of investment so selling them can help reduce the amount of spending E.ON will have to do in years to come,” Christian Kleindienst, an analyst at UniCredit SpA in Munich, told Bloomberg, without specifying which businesses the company will sell.

E.ON, the world’s largest utility by sales, aims to raise 15 billion euros by the end of 2013, and is considering selling its UK power grid, which often serve as an inflation hedge and an attractive tool for long-term investors.