State champion MVM moves in on more Hungarian energy assets

By bne IntelliNews March 6, 2014

bne -

MVM, the national energy champion being built up by Hungary, looked to secure another set of assets on March 5 as it signed preliminary documents on the acquisition of several subsidiaries of Germany's E.ON.

The non-binding letter of intent covers the possible acquisition of stakes in E.ON's Hungary's power and gas distribution companies, as well as its client service centre. MVM said it will proceed with due diligence, and plans to close the acquisition of all or part of the five units involved by the end of this year.

The deal is just the latest by MVM, which has been nominated to gather up energy assets by the Fidesz government as it pushes its way to state domination of the energy market. Budapest claims that its eventual aim is to make Hungarian utilities a non-profit sector.

"In line with the government's energy policy and the national energy strategy, MVM has taken important steps toward higher energy security in Hungary," MVM said in a statement.

In October, MVM bought E.ON's gas import, trade and storage business at a cost of HUF281.3bn (€909m), while it has also purchased gas storage units from MOL and the Fogaz distribution company from RWE in recent months.

While the government maintains that the purchases are part of a drive to reduce Hungary's dependence on Russian energy, some suggest it is rather that it wants to put itself in the middle of the trade. Recent deals with Moscow on the South Stream gas pipeline and the Paks nuclear plant appear to actually increase Hungary's energy independence on Russia.

Meanwhile, German utilities are happy enough to sell off assets in smaller markets such as Hungary. While Berlin's energy policy has hit their utilities hard on top of the crisis, E.ON and RWE have both been on a disposal drive. However, Hungary is pushing hard to drop the valuations of local utilities before it buys, having implemented a 20% cut to regulated prices over the past 12 months or so, with another round on the way.

Related Articles

UK demands for EU reform provoke fury in Visegrad

bne IntelliNews - The Visegrad states raised a chorus of objection on November 10 as the UK prime minister demanded his country's welfare system be allowed to discriminate between EU citizens. The ... more

Erste claims Hungary is breaking peace deal with banks

bne IntelliNews - Hungary will breach its February agreement with Erste Group if it makes the planned reduction in the bank tax conditional on increased lending, the Austrian lender's CEO ... more

Austria's Erste rides CEE recovery to swing to profit in Jan-Sep

bne IntelliNews - Erste Group Bank saw the continuing economic recovery across Central and Eastern Europe push its January-September financial results back into net profit of €764.2mn, the ... 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