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M&A Activity On The Increase In European Utility Sector, With Repercussions For Credit Quality Oct 05

  • ID: 1712834
  • October 2005
  • Region: Europe
  • Standard & Poors


  • E.ON SE
  • Endesa S.A.
  • Fortum Oyj
  • Iberdrola S.A.
  • RWE AG
  • MORE

The European utility sector is starting to see an increase in M&A activity after a period of relative inaction during 2003 and 2004. Standard & Poor's Ratings Services continues to believe that the principal threats to credit quality for European utilities are an increase in debt-financed M&A activity and/or shareholder pressure for enhanced returns. The risk and ratings impact of increased M&A activity would depend on the level of business and financial risk of the target company, its valuation and size, and how any deal is financed. Generally, however, large deals are financed with significant cash elements and, as a result, heightened M&A activity is expected to correlate with higher ratings risk. Furthermore, this risk is greater due to the...

Standard and Poors RatingsXpress Credit Research provides in-depth coverage of international corporates, financial institutions, insurance companies, utilities, sovereigns and structured finance programs. RatingsXpress Credit Research lets users determine the credit rating of holdings and identify key factors underlying an issuer's creditworthiness, distinguishes the different risk exposures for new and existing deals, and provides an understanding of how their analysts interpret key regulatory, political and environmental events and their economic impact.

Research Type: Commentary
Criteria articles describe the thought process and methodology Standard & Poor's analysts use in determining ratings. These commentary pieces discuss both the quantitative (economic and financial) and qualitative (business analysis and caliber of management) aspects of the analysis, as well as legal issues.

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- Electricite de France S.A.
- United Utilities PLC
- Endesa S.A.
- Vattenfall AB
- Iberdrola S.A.
- Scottish Power U.K. PLC
- Suez S.A.
- Edison SpA
- Public Power Corp. S.A.
- National Grid Holdings One PLC
- Veolia Environnement S.A.
- EDP - Energias de Portugal S.A.
- Enel SpA
- Union Fenosa S.A.
- EnBW Energie Baden-Wuerttemberg AG
- Fortum Oyj

Note: Product cover images may vary from those shown
Note: Product cover images may vary from those shown


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