American Water Works Company, the largest publicly traded water services company in the United States, and RWE AG, an international provider of electricity, gas, water and wastewater management services, have entered into an agreement under which RWE will purchase all the outstanding shares of American Water at a price of $46 per share in cash.
RWE's all-cash proposal represents a premium of 36.5 percent to the average closing price of American Water shares over the 30 trading days ended September 10, 2001, and a 29.5 percent premium above the all-time high closing price of $35.52. The proposed transaction has a total value of approximately $7.6 billion, including the assumption of approximately $3.0 billion in debt American Water had outstanding as of June 30, 2001.
Upon completion of the transaction, American Water will be combined with the U.S. operations of Thames Water, RWE's London-based international water services business. American Water will manage the joint operations in North and South America. American Water's CEO, Jim Barr, will report directly to Bill Alexander, CEO of Thames Water.
The transaction is expected to take more than a year to complete, following approval by American Water's shareholders and appropriate state regulatory agencies. It is expected to have no effect on the company's previously announced plans to acquire Azurix North America as well as the water and wastewater assets of Citizens Communications, or to sell its Salisbury, MA, operations and divest its New England operations to Aquarion. WW/
