Adia eyes £3.5bn E.ON assets

A consortium led by Abu Dhabi Investment Authority (Adia) will buy UK assets of Germany’s E.ON, is one of the world's largest investor- owned power and gas companies, in a 3.5 billion pound deal.

The other consortium members include Canada Pension Fund and Macquarie to buy E.ON’s distribution network in the United Kingdom.

A successful sale would mean Britain's two biggest distribution networks will have changed hands in recent months. EDF, the French state-controlled group, sold its business to Li Ka Shing, the richest man in Hong Kong, for a higher than expected £5.8bn, daily Telegraph reported on Monday.

Both companies have expressed concern about the absence of incentives to justify the heavy investment load.

E.ON has been cutting costs and selling assets to reduce debt levels. Johannes Teyssen, E.ON's chief executive, is expected to announce further sell-offs when he releases details of a strategic plan and debt reduction programme on Wednesday.

The Government has ruled out direct subsidies to encourage construction, although it has indicated it is ready to provide "backdoor" support through a floor on carbon prices but EDF and E.ON feel it does not go far enough, the daily said.