A billion dollar water works
17 Sep 2001
Essen-based RWE has agreed to acquire all the outstanding ordinary shares of the American Water Works Company, based in Voorhees, New Jersey.
RWE will pay $46.00 in cash per American Water share, or a 36.5% premium to the average closing price of American Water shares over the 30 trading days ended 10 September 2001.
The proposed transaction has a total equity value of $4.6 billion, and an enterprise value of $7.6 billion including the assumption of approximately $3.0 billion in debt.
The American Water Works Company is the largest publicly traded water services company in the US. Currently operating in 23 states, the company generated revenues of $1.4 billion in 2000.
It has approximately 5,000 employees.
Upon completion of the transaction, American Water will be combined with the US operations of Thames Water, RWE's London-based international water services business. American Water will manage the joint operations in North and South America.
American Water's CEO, J. James Barr, will report directly to Bill Alexander, CEO of Thames Water.
Thames Water, the RWE Group water business, is the world's third largest water company. Thames Water entered the US water market in 2000 through the acquisition of Westfield, New Jersey-based E'Town Corporation.
Upon completion of the American Water transaction, including two significant pending acquisitions by American Water, Thames Water will have a presence in more than 44 countries on six continents, serving a population of approximately 56 million people, up from 43 million today.
The transaction has been approved unanimously by the Board of Directors of American Water and the Management and Supervisory Boards of RWE.
In addition, shareholders representing 24% of American Water shares have entered into binding agreements to support the merger. The transaction, which is subject to the approval of the majority of American Water's shareholders and utility regulatory commissions in many of the 22 states in which American Water conducts its regulated business, is targeted for completion within 18 to 24 months.
