RWE buying American Water

September 17, 2001 Posted: 1111 GMT

FRANKFURT, Germany (Reuters) -- German utility RWE AG agreed Monday to buy U.S. water utility American Water Works for $4.6 billion plus $3 billion in debt, giving it a major foothold in the world's biggest water market.

RWE said the bid, which has been approved by both firms' supervisory boards, amounts to $46 per ordinary share or a premium of 36.5 percent over American Water's 30-day share price average up to Sept. 10.

RWE said it would merge American Water (AWK: Research, Estimates), the No. 1 U.S. publicly traded water company, with its global water company based in the UK, Thames Water, making it responsible for RWE's North and South American operations.

American Water's Chief Executive Jim Barr will report to Thames CEO Bill Alexander.

American Water, with operations in 23 U.S. states and 5,000 employees, is the largest regulated water business listed on the New York Stock Exchange.

"The purchase makes RWE and Thames Water market leaders in the USA, the largest water market with the highest growth rates in the world," RWE said in a statement.

The deal still requires regulatory and American Water shareholder approval. Already, 24 percent of American Water's shareholders have approved the deal.

Shares of American Water Works closed at $34.12 on Sept. 10.

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