Hungary’s “national champion” MVM eyes acquisition drive as it awaits news on nuclear role

By bne IntelliNews September 19, 2016

Hungary’s largest utility, the state-owned MVM, is eyeing a number of acquisitions both home and abroad, the company’s CEO told local press in comments published on September 16. However, the company appears none the wiser as to whether it will have a role to play in the controversial and secretive expansion of the Paks nuclear power plant.

MVM is in talks to acquire Csepel Power Plant from Swiss holding Alpiq, Peter Csiba told Vilaggazdasag. Located in Budapest, Csepel is one of the most advanced gas-fired power plants in Hungary. The Hungarian company is also continuing to try to push through a deal with German peer RWE to increase its stake in the Matra Power Plant, as well as eyeing investments in renewable energy assets, the executive adds.

The state-owned utility has been remarkably quiet on the M&A front over the last year or so following several years of busy acquisition activity. MVM was earmarked as a “national champion” and filled with the bevy of gas and power assets that had been bought by the state in 2012-14 as it chased out many foreign investors with its push to make utilities a “non-profit” sector.

However, that role shifted early last year as Budapest established the First National Utility Company (ENKSZ) – owned by state development bank MFB – to provide electricity, gas and district heating services. In the meantime, MVM – operator of the Paks nuclear plant – has been trying to establish its role in the planned Paks 2 plant, the expansion of the country’s only nuclear plant, to be funded and built by Russia.

There is no final decision yet on who will be the operator of Paks 2, but it is MVM that possesses the nuclear knowledge, Csiba asserted. Operating a nuclear plant is not a routine task, he warned. Hungary, which is reportedly on the cusp of winning EU approval for the project, has used national security legislation to keep most details secret. The CEO says MVM is working on entry into the Russian power market, initially via the wholesale segment.

Meanwhile, the planned increase of MVM’s stake in Matra – from 25% to 49% – has hit a snag, the CEO admited, according to portfolio.hu. Talks with RWE have failed to produce an agreement on terms. However, Csiba insisted MVM spies an opportunity; like many of its western European peers, RWE is in the process of restructuring to reduce its holdings of conventional generation assets.

Csiba compared the situation to that of E.ON, from which MVM has acquired several major assets, including Hungary’s main importer of Russian gas in 2013. The MVM CEO said he hopes to strike a deal with RWE shortly.

MVM is not in negotiations at present about buying local power distribution networks, but it remains open to such transactions, he added. The goal is to reach the highest number of end-users possible. The company is also eyeing further investment in solar energy capacity in Hungary, and targets the acquisition of yet another hydropower plant in Romania by the end of the year.

There are suggestions that MVM could play a major role in the Hungarian central bank’s effort to awaken the sleepy Budapest Stock Exchange via an IPO, however that has been a topic of speculation for years. “We hear talk of a potential IPO for MVM every few years, but have always remained state-owned,” the energy group’s deputy CEO, Attila Bally, told bne IntelliNews in February, before adding, “it’s not our decision of course”.

Related Articles

Latvian gas grid shareholders reportedly plan to prevent state takeover

Some shareholders in the newly created Latvian gas infrastructure company, Conexus Baltic Grid (CBG), are reportedly planning to sell their stakes to third parties before the state is able to execute ... more

Iran to sell Russia 100,000 bbl/d in cash and barter oil deal

Iran has said it will start selling 100,000 barrels of oil a day to Russia within the next 15 days with payment to be made half in cash and half in goods and services, Iranian news agencies reported ... more

Deripaska’s En+ hires advisors for IPO

Russian oligarch Oleg Deripaska has hired US banks Citi and JP Morgan together with Russian investment banks Sberbank CIB and VTB Capital to prepare his energy holding EN+ for an IPO this year, two ... more

Register here to continue reading this article and 2 more for free or purchase 12 months full website access including the bne Magazine for just $119/year.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

To continue viewing our content you need to complete the registration process.

Please look for an email that was sent to with the subject line "Confirmation bne IntelliNews access". This email will have instructions on how to complete registration process. Please check in your "Junk" folder in case this communication was misdirected in your email system.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

If you have any questions please contact us at sales@intellinews.com

Subscribe to bne IntelliNews website and magazine

Subscribe to bne IntelliNews website and monthly magazine, the leading source of business, economic and financial news and commentary in emerging markets.

Your subscription includes:
  • Full access to the bne content daily news and features on the website
  • Newsletters direct to your mailbox
  • Print and digital subscription to the monthly bne magazine
  • Digital subscription to the weekly bne newspaper

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

bne IntelliNews
$119 per year

All prices are in US dollars net of applicable taxes.

If you have any questions please contact us at sales@intellinews.com

Register for free to read bne IntelliNews Magazine. You'll receive a free digital subscription.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

IntelliNews Pro offers daily news updates delivered to your inbox and in-depth data reports.
Get the emerging markets newswire that financial professionals trust.

"No day starts for my team without IntelliNews Pro" — UBS

Thank-you for requesting an IntelliNews Pro trial. Our team will be in contact with you shortly.

Dismiss