Sat, Feb 11 2012

CEZ buys blocking stake in Turkish power distributor, to invest $3B

Wed, Oct 08 2008 14:24 CET

byElena Koinova

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Czech CEZ, touted as the most successful power utility in Central and Eastern Europe (CEE), has continued expanding its reach in the region. On October 8, the group purchased 37.4 per cent of Turkey's Akenerji Elektrik Uretim AS for $302.6 million, Reuters news agency reported.

The deal is part of a larger strategic alliance agreement CEZ sealed with the Turkish conglomerate Akkok Sanayi Yatirim & Gelistirme AS. Under the agreement, the Czech company was entitled to half the majority stake of 75 per cent Akkok held in Akenerji.

The deal comes after in July CEZ and Akenerji successfully bid for Sedas, operator of the power grid in the Turkish Black Sea province of Sakarya. It also comes short on the heels of a winning takeover in Albania. In late September, CEZ denied rivals with a 102 million euro offer for a 76 per cent stake in power distributor DSO.

In Bulgaria, CEZ operates the power distribution companies in Sofia, Sofia region and Pleven, as well as Varna thermal power plant.

According to analysts, the October 8 deal was CEZ' attempt to expand its foothold in a market of rapid growth. Focus on Turkey was all the more justified as opportunities for takeovers in CEE are running dry.

"Together with CEZ, Akenerji plans to achieve an expansion of its production portfolio [from 496] to 3000MW over the next five years," CEZ said in the statement. "This increase will require an investment worth about $3 billion."

CEZ and Akkok have been long-time partners, with fields of cooperation spanning from real estate to the chemical industry.

"From this moment we will cooperate with our partner, the CEZ Group, in the fields of power production, distribution and trade," Akkok's board chairman Omer Dinckok said in a statement, as quoted by Bloomberg news agency.

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