RWE ponders U.S. bid

August 27, 2001 Posted: 1314 GMT

LONDON (CNN) -- Germany's RWE is considering a $3.6 billion bid for American Water Works, the largest U.S. regulated water business, a report said.

The move by the owner of Britain's Thames Water would be part of its strategy of diversifying its activities into water and expanding its operations in the United States, the Financial Times said.

Senior managers from RWE have been to American Water (AWK: Research, Estimates) offices in New Jersey in the past two weeks to negotiate a deal, the FT said.

Acquiring American Water, which employs 5,000 and has annual revenues of $1.37 billion, would give RWE a strong foothold across the continent and a significant increase to its customer list. American Water serves more than 10 million customers in the U.S.

RWE declined to comment on Friday on a report it was about to buy U.S. water supplier Azurix, a unit of energy trader Enron Corp (ENE: Research, Estimates), in a move analysts said made strategic sense.

RWE, Germany's second-largest utility, became the world's third largest water company behind French rivals Suez and Vivendi Environment when it acquired Thames Water in Britain last year.

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