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MVM signs contract on purchase of Főgáz stake

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The state-owned Hungarian energy group MVM and RWE Gas International have signed the sale and purchase agreement for MVM to acquire a 49.83% stake in regional gas distributor Főgáz from RWE for HUF 41 billion, MVM representatives informed national news service MTI.

The transaction could be closed in the first half of 2014 after approval from the relevant authorities and consent from Budapest City Council, co-owners of Főgáz, who will remain majority shareholders, with 50% plus one held.

A general meeting of MVM approved the acquisition on Tuesday, December 17. The deal comes in well before a deadline of December 31 mentioned by Főgáz CEO László Köncz on December 9. Prime Minister Viktor Orbán said in September that the state was in regarding the RWE stake acquisition, part of the sitting government’s plan to renationalize up to seven utility companies that had been sold to private parties. Orbán said at the time his government is in talks on nationalizing 6-7 big utilities companies that were earlier privatized and intended to make energy services a non-profit business. 

The transaction is the second acquisition of gas assets by MVM this year: The state-owned electricity company purchased the Hungarian natural gas trade and storage business of Germany-based electric-utility company E.ON for HUF 281 billion in October this year.

Főgáz has 820,000 retail and corporate clients in the greater Budapest metropolitan area.

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