Verbund, Austria's biggest utility, plans to start an energy venture in October with EVN AG (EVN), Austria's third-biggest utility, and local utilities after the companies met all the requirements set by the European Union.
The venture will be Europe's eighth-largest electricity trader, Verbund has estimated. It will have trading volumes of about 100 terawatt hours a year, or enough to meet the needs of 5 million households. Analysts have estimated the partners will save about 80 million euros ($90.2 million) a year.
The European Commission, the executive arm of the EU, approved the venture in June of last year after Verbund and its partners agreed to sell assets and give up exclusive sales contracts. The start, initially scheduled for Jan. 1, was postponed because Verbund hadn't sold a unit in time. The EU now approved the sale of Verbund's APC unit to Slovenia's Istrabenz Energetski Sistemi.
``The expected synergies of 40 million euros per year, prorated to 2004, will additionally strengthen the international competitive position of Verbund,'' Chief Executive Hans Haider said in an e-mailed statement.
Verbund pursued the venture after Austria opened its power market to competition and the government, which owns 51 percent of the company, blocked an accord with Germany's E.ON AG because of opposition to foreign ownership. The venture will help the partners cut costs and expand in Eastern Europe, analysts have said.
Shares in Verbund advanced 26 cents, or 0.2 percent, to 150 euros at 2:12 p.m. in Vienna.
To contact the reporter on this story: Matthias Wabl in Vienna at email@example.com
To contact the editor responsible for this story: Tim Coulter at firstname.lastname@example.org Chris Collins at email@example.com