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German’s E.ON CEO Teyssen says to put focus on organic growth

German’s E.ON CEO Teyssen says to put focus on organic growth

BERLIN: Chief Executive Johannes Teyssen said E.ON German utility plans to put priority on natural growth rather than acquisitions once it has spun off its power plants, energy trading and upstream businesses in 2016.

Teyssen told E.ON will grow more through organic growth and less via acquisitions. He also sought to assuage concerns about the new company, which has been labelled by some analysts as an “awful utility” a comparison to similar developments in the banking industry.

He said he was convinced that both entities would be highly attractive for investors. Both companies will have global ambitions. Shares in the group retreated 1.4 percent in mid morning trade, having gained more than 4 percent on Monday.

Further E.ON’s future set-up will be mostly based on power and gas distribution grids, which yield mid- to high-single digit returns usually set by country regulators, making them stable cash machines. This has made them a favourite target of infrastructure investors on the lookout for stable returns amid record-low interest rates.

E.ON relies on more than 1 million kilometers of networks Across Europe most of it located in its home market Germany, and supplies 26 million grid customers.