by Otto Jager, Group Treasurer, TenneT
TenneT is the high voltage grid operator of the Netherlands, with over 90% of revenues derived from regulated business. On 10 November 2009, TenneT announced the acquisition of the German high voltage grid of operator Transpower (formerly the high voltage grid of E.ON) for an agreed enterprise value of EUR885m. The acquisition creates Europe’s first cross-border TSO. In 2008, the company recognised that it was embarking on a period of expansion, and sought to introduce specialist financing experience into the team. As a result, Otto Jager joined TenneT as Group Treasurer in 2008 following a career in banking.
E.ON’s divestment of its high voltage business, Transpower, created a significant opportunity for TenneT to pursue its strategy for European integration of high voltage grids. The company had already established links with grids in Norway, Belgium, Germany and UK, but an international acquisition would be a major step in achieving its integration ambitions. However, it was immediately apparent that financing would be a hurdle to achieving this. In 2008, mergers and acquisitions had declined sharply, and deals that remained were difficult and expensive to conclude. To achieve the acquisition of Transpower, TenneT knew that it was likely to require up to EUR1bn in financing.