Swiss-based energy trader MET Group has struck a deal to buy RWE Energy (RWEE), a Romanian gas and power business controlled by Germany’s Innogy.
Neither companies disclosed the price tag of the transaction, which is expected to close in the second half of the year, pending approval by regulators.
In a statement, MET said the purchase of RWEE would create synergies with its existing operation in Romania. RWEE supplies electricity and natural gas to small and medium-sized enterprises (SMEs), many of which are retail chains and energy-intensive manufacturers. It was set up in 2008.
According to data published by Romania’s finance ministry, the company booked a loss of 7 million euros (US$8.3 million) in 2017 on a turnover of 137 million euros (US$161 million).
Following its takeover of RWEE, MET will control a 10% share of the Romanian energy market, serving around 5,000 clients. MET has been active in the country since 2009, when it set up MET Romania Energy Trade. The unit initially sold only natural gas, but by the end of 2014 it had branched out into the power market. MET consolidated its position in 2016, when it acquired Repower Furnizare Romania, a subsidiary of another Swiss utility, Repower. Repower Furnizare Romania also focuses on power sales to SMEs.
MET is controlled by Hungarian investor Benjamin Lakatos. The company started operations in Hungary’s wholesale and retail gas sector in 2007, and has undergone a rapid expansion since then. It is now present in 15 European countries and sold 35 bcm of gas across the continent last year. Besides gas and power, its business also extends into oil and LNG trading as well as power generation.
Innogy’s main shareholder is German energy giant RWE, which owns a 76.8% stake in the company. In May, RWE struck a deal with domestic rival E.ON to divide up Innogy’s assets between them, marking the biggest overhaul of Germany’s power sector since the government’s decision to abandon nuclear power in 2011.
Romania has made significant strides in recent years towards liberalisation of its power sector. Bucharest began deregulating energy prices in 2007, and in 2014 state-set tariffs for non-household users were scrapped altogether. As of the start of this year, residential consumers too no longer have to pay tariffs approved by regulators.
There are over 100 electricity suppliers in Romania today. Besides MET, the largest players include Italy’s Enel, Germany’s E.ON and the Czech Republic’s CEZ, as well as domestic firms Electrica Furnizare, Tinmar Energy and Transenergo.