BP buys E.ON businesses

July 16, 2001 Posted: 0755 GMT

LONDON (CNN) -- British Petroleum is to buy the oil refineries and petrol stations of Germany's largest power group E.ON, the pair have announced.

The British oil and gas company will pay around $5 billion for E.ON's petrol stations – the largest chain in Germany.

BP (BP-) has confirmed it will take a 51 percent stake in E.ON (FEOA) unit Veba Oel in a  cash and stock deal, with an opportunity to eventually become the sole owner in the second quarter of next year.

BP, the world's third biggest publicly traded company, said it may merge its own German oil business with the new unit in a move which could cut costs of the combined businesses by 15 percent and would lead to a reduction in the workforce.

In return for Veba Oel, E.ON is getting a $1.6 billion payment and a 51 percent stake in Gelsenberg, which contains BP's 25.5 percent stake in Ruhrgas, Germany's largest gas supplier, the companies said in statements.

BP shares were flat at 571 pence in London in early morning trade Monday, while E.ON was slightly off at 0.2 percent on the Xetra Dax at 63.55.

Veba Oel operates more than 2,500 petrol stations in Germany and employs around 8,600 staff. It reported sales last year of 28.8 billion.

BP owns around 1,000 petrol stations in Germany and is hoping the deal will give it a dominant position in the German fuels market.

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