Selling the Thames

German giant RWE announced last Friday that it intends to sell its Thames Water business in the UK as well as its American Water business in North America.

RWE believes it can make the best use of its core strengths by concentrating on the converging European electricity and gas markets instead. The limited synergies between the North American and UK water businesses and the European energy business were also a major factor in it's decision to rid itself of the water companies.

RWE is evaluating various divestment alternatives for American Water. Options include an initial public offering as well as a sale to financial investors. Once the transaction is underway, the company plans to begin the sales process for Thames Water. Thames Water's Continental European activities, excluding Pridesa, Spain, will be integrated into RWE Energy.

Both the North American and UK transaction will be subject to the approval of the RWE Supervisory Board as wells as to regulatory approvals.

The company aims to complete both deals during 2007.