Holland’s two largest energy concerns Essent and Nuon have terminated their proposed merger. The announcement was made in a joint statement by the companies on Friday evening and follows over a week of speculation that talks had broken down.
The statement said that it had not been possible to ‘reach agreement about how underlying company data, on which the division of shares was based, could be verified’.
Initially the division of shares in the new combine was set at 55% for Essent and 45% for Nuon. But this was agreed in 2005, and since then, Nuon’s financial performance has outstripped that of Essent, leading Nuon to demand at least 50% in the joint concern. This was the main stumbling block to the merger.
According to the Financieele Dagblad on Saturday, sources within Nuon also claim that Essent is worth less than they were led to believe ‘There is a lack of willingness at Essent to answer Nuon’s questions,’ the paper quotes an anonymous source at Nuon as saying.
The FD goes on to say that there has been increasing irritation between the two negotiating teams over the past weeks as well as a vendetta between Nuon’s supervisory board president Wim Meijer and its company chairman Leo van Halderen.
While Essent’s shareholders back the merger, those of Nuon have always been critical. Both Essent and Nuon are owned by local governments. Annemarie Moons, chair of Essent’s shareholders committee, told the media that Nuon was not prepared to go the extra mile to make the merger work.
Nuon booked turnover of €5.6bn in 2006 and has a staff of 9,700. Essent’s turnover in 2006 was €6.4bn and employs around 10,000.
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