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Our Take on European Utility M&A Activity

Activity in the U.S. is small change when compared with deals overseas.

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Europe, home to some of the world's largest and most cash-rich utilities, has seen its own wave of merger activity over the past year to parallel the boom in utility M&A in the U.S. The scale of the proposed mergers in many cases dwarfs the size of U.S. deals.

For instance, the acquisition of Spain's  Endesa (ELE) by Germany's  E.ON (EON) is the largest utility acquisition ever proposed, with a cash tender offer of $34.7 billion and the assumption of $30 billion in debt. The stock-swap merger of France's  Suez (SZE) and Gas de France would create one of world's three largest energy utilities. Both France's EdF and Italy's  Enel (EN) are actively courting takeover targets, and Britain's  Scottish Power (SPI) remains on the selling block. However, it's important to note that the reasons behind European mergers and acquisitions are quite different from those driving similar actions in the U.S.

Paul Justice does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.