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. Last Updated: 07/27/2016

E.On Wraps Up Buy of OGK-4 for $6Bln

WIESBADEN, Germany -- E.On, the world's largest utility, completed the 4.1 billion-euro ($5.84 billion) purchase of generating company OGK-4, its first step into the Russian power market.

E.On chief executive Wulf Bernotat signed contracts to buy 69 percent of the company with Anatoly Chubais, the president of Unified Energy Systems, at Russian-German talks in the German city of Wiesbaden.

"This is an important step that speaks for our openness and liberal approach to the economy," President Vladimir Putin told a news conference.

State-owned utility UES is selling OGK-4 as part of the divestment of six power generators to attract investment into the country's growing power market.

E.On announced last month that Unified Energy System had selected its 146.5 billion-ruble bid as the best.

European utilities, including Italy's Enel and Germany's RWE, are lining up to enter the Russian power market.

E.On is seeking expansion in Russia because growth in western and central Europe is hampered by high prices, competition and state intervention.

OGK-4 owns and operates five power plants in the regions of Tyumen, Krasnoyarsk, Moscow, Smolensk and Perm. It has an overall installed power-generation capacity of around 8.6 gigawatts, equivalent to about 6 percent of Russian thermal-generation capacity.

In September, E.On won a tender for 29.8 billion OGK-4 shares, or 47.4 percent of the generating company.

At that time, it committed to subscribe for up to another 13.9 billion shares in a capital increase, and it may end up with an additional 7 percent, as Russian law requires it to make an offer to minority shareholders.

"The mandatory offer process will probably be concluded sometime in early 2008," said E.On spokesman Jens Schreiber.

Reuters, AP