Dutch energy companies Nuon and Essent agree merger

Feb 1, 2007, 10:20 GMT

Amsterdam - The two main Dutch energy companies, Nuon and Essent, have agreed a merger, a Nuon spokesman said Thursday.

The various provinces and local authorities that own the two companies have yet formally to agree to the merger, which is also subject to approval from the Dutch competition authorities (NMa).

Nuon and Essent have been in talks for almost a year with the aim of creating a national 'energy champion' capable of competing in the liberalizing European market and with the necessary weight to negotiate lower prices from primary energy providers.

Earlier this month, it was made public that they had set up a joint company called Nusent ahead of a likely merger. Essent is thought likely to hold 55 per cent and Nuon 45 per cent in the new company.

Nusent would have 4 million of the 6 million clients in the Netherlands, but the NMa has indicated it might require the sale of power stations.

Nusent would also have to relinquish a million household customers to smaller companies, like Eneco and Delta.

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.

The energy companies and the trade unions have opposed the split.