RWE Considering $3.6 Billion Bid for American Water
German utility group RWE AG is considering a $3.6 billion bid for American Water Works, the largest regulated water business in the United States, according to the Financial Times.
The move by the owner of Britain's Thames Water would be part of its strategy of diversifying its activities into water and expanding its operations in the United States, the newspaper said.
It reports that senior management representatives were believed to have been to the American Water office in New Jersey in the past two weeks to negotiate a deal.
Acquiring American Water, which employs 5,000 and has annual revenues of $1.37 billion, would give RWE a strong foothold across the continent and a significant increase to its customer list, the Financial Times said. American Water serves more than 10 million customers across the United States.
The company has indicated it wants to build up its operations in the sector, where it is world number three behind French rivals Suez Lyonnaise and Vivendi.
In July, American Water reported net profits growth of 11 percent in the second quarter to $49.2 million.
RWE declined to comment on Friday on a report it was about to buy U.S. water supplier Azurix, a unit of energy trader Enron Corp, in a move analysts said made strategic sense.
``It is RWE's policy not to comment on such market speculation,'' an RWE spokesman told Reuters.
Enron also declined to comment on the purported deal.
The company also would not comment on speculation in a report in German business daily Handelsblatt that it was looking at Gelsenwasser AG, a unit of rival E.ON AG .
RWE, Germany's second-largest utility, has bolstered its water activities since acquiring Thames Water in Britain last year.