Agreement on HEW concluded between Sydkraft-E.ON and Vattenfall

Agreement on HEW concluded between Sydkraft-E.ON and Vattenfall Vattenfall has now reached agreement with Sydkraft and E.ON on the form of the final agreement covering the acquisition of Hamburgische Electricitäts-Werke (HEW). This represents another important step towards the realisation of Vattenfall's growth strategy in Europe. The deal means that Vattenfall will take over some 37 per cent of the shares of HEW and thus reach a majority holding of 71.2 per cent. HEW is the fifth largest power group in Germany with approximately one million customers, sales of over SEK 20 billion and almost 7 000 employees. "Germany plays a central role in our effort to become a leading energy company in Europe. A majority holding in HEW gives us a solid base for this and we can now, together with HEW, concentrate on the continuing development of our business in Germany," says Vattenfall's President and CEO Lars G. Josefsson. The agreement is slightly different to the preliminary agreement presented in October 2000. Instead of Vattenfall's holdings in Vattenfall Naturgas, Vattenfall's electricity distribution operations in Vikbolandet and in Söderköping are now included in the deal. Payment for the HEW shares consists, in brief, of the following: 1. A cash payment of SEK 4.278 billion 2. 8,5 per cent of the shares of Forsmark Kraft AB 3. Network operations previously run by Forskraft Distribution AB 4. Network operations in Vikbolandet and Söderköping that are currently being run by Vattenfall Östnät AB 5. The holdings in Hafslund AS 6. The holdings in Fredrikstad Energiverk AS, Fredrikstad Energinett AS and Fredrikstad Fjerrvarme AS 7. The holdings in the Baltic Cable 8. he holdings in the Czech company Vychodoceska Energetika (VCE), and 9. The holdings in Lithuanian Power Company (LPC). The deal is conditional, among other things, on the approval of the competition authorities and boards. From Vattenfall's Press Office, telephone +46 8 739 50 10. For further information, please contact: Lars G Josefsson, President and CEO of Vattenfall AB, telephone +46-8-739 50 05. Karl-Erik Olsson, press officer, Vattenfall AB, telephone +46-8-739 75 83. Vattenfall is one of the largest energy companies in Europe, accounting for 25 percent of total electricity sales in the Nordic region. The total electricity generation is 85 TWh. Vattenfall is a leading operator of regional and local distribution networks. About 2.4 millions customers get their energy solutions or other services from Vattenfall. The Group also conducts operations in the areas of heating and natural gas, as well as transmission services and consulting for the energy sector. Vattenfall's biggest customers are energy companies, industrial enterprises, and retail customers in the Nordic region. Vattenfall is also active in Germany, Poland, the Netherlands, and the Baltic countries. ------------------------------------------------------------ This information was brought to you by Waymaker http://www.waymaker.net The following files are available for download: http://www.waymaker.net/bitonline/2001/03/12/20040817BIT20720/wkr0001.pdf