RWE AG today announced that it will enter into a partnership with Essent N.V., the Arnhem-based leading Dutch utility.

The companies have reached agreement on the terms and conditions for a binding all-cash offer by RWE to the shareholders of Essent for the acquisition of all the issued and outstanding shares of Essent. RWE will not be acquiring Essent’s electricity and gas distribution networks and waste management operations.

Upon successful completion of the transaction, RWE will become one of the leading energy suppliers in the Benelux region with a strengthened position in North-Western and Central Europe.

Essent is a leading utility in the Netherlands and operates an attractive power plant portfolio based on gas, renewables, coal and nuclear. The company has a strong renewables business, which will complement RWE’s own efforts to increase its renewables capacity to 4,500 MW by 2012.

Both companies’ efforts in the area of carbon capture and storage also complement each other. Essent (excluding the network and waste management activities) has pro forma estimated revenues and a pro forma normalised EBITDA for 2008 of Euro 6.55 billion and Euro 882 million, respectively, and approximately 7,800 employees.

Essent’s principal shareholders are the provinces of Noord-Brabant, Limburg, Overijssel, Groningen, the Association of Municipal Shareholders Limburg, the Association of Municipal Shareholders Noord-Nederland and the municipalities of ‘s-Hertogenbosch and Tilburg.

Describing Essent as an excellent match for RWE, Juergen Grossmann, Chief Executive Officer of RWE, said: “I am extremely pleased about entering into this new partnership with Essent.

We are teaming up with a successful and attractive company, with strong market positions in gas and in the power retail market in the Netherlands and Belgium – markets that are very close to us, not just geographically but also culturally. Essent’s track record in the renewables and trading business, its customer service activities including branding and its expertise in the gas sector make it a perfect match for our company.

Jointly, we will strengthen our position as one of the leading energy companies in Europe. Together, we are well positioned to increase security of supply in North-Western Europe and to contribute to making sustainable and affordable energy available in the Netherlands.”

“We are determined to foster and strengthen the Essent brand. Essent will become RWE’s operating company in the Netherlands and Belgium and will continue as an independent entity responsible for the execution of the Group’s strategy in these markets. We are joining forces in the renewables sector, focusing on wind and biomass, and in our efforts to develop the carbon capture and storage technology for a climate friendly and affordable future energy supply”, he continued.

The Chief Executive Officer of Essent, Michiel Boersma, commented: “Essent will now team-up with a leading and respected foreign partner. This opens a wide range of possibilities for our company, our employees and our customers. In the current situation of a rapidly changing market Essent partnering with RWE will create a strong foundation for the future”.