Report: Dutch energy companies Nuon and Essent "agree merger"

Jan 31, 2007, 15:45 GMT

Amsterdam - The two main Dutch energy companies, Nuon and Essent, have agreed a merger, national public radio reported Wednesday, citing sources close to the companies.

NOS radio quoted 'reliable sources' close to the 10-month talks between the two and said details would emerge Thursday.

The aim of the merger is to create a national energy company that will be able to compete in an increasingly liberalized European energy market.

The two companies, which are currently owned by the Dutch provinces and local authorities, earlier this month set up a joint company called Nusent as a 'vehicle' for a possible fusion.

According to NOS, Essent will hold 55 per cent and Nuon 45 per cent of the merged company.

Nusent would have 4 million of the 6 million clients in the Netherlands, but the competition authorities have indicated it might be compelled to sell power stations and relinquish a million household customers.

The government of Prime Minister Jan Peter Balkenende - currently operating in a caretaker capacity since inconclusive elections in November - has backed splitting energy production and sale from the distribution network.

This would be a prelude to privatizing the former while retaining the network in the public sector to ensure fair competition.