E.ON Essay

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E.ON describes itself as the world’s largest investor owned power and natural gas company. E.ON is involved in every step of the power supply chain from development, through transportation, to final delivery to customers.  The company describes its wide range of activities as not only allowing it to minimize risk but to also claim that its supply of both gas and power allows its customers  the benefit by needing only one supplier. The antitrust  offices in the European Commission have taken issue with that assertion.

In 2007 E.ON reported €67 billion in sales and €7.7 billion  in  profits.  It  employs  approximately  88,000 employees. It is based in Dusseldorf, Germany, and operates throughout Europe but also has electric, gas, and renewable energy operations in North America.

E.ON came into existence in 2000 when the companies of VIAG in Germany  and VEBA AG (which had  existed  since  1929)  were  merged.  Since  the merger  E.ON has made  several important acquisitions including companies  in Britain, Russia (where is also has an arrangement with Gazprom), and Sweden. It has also extended its reach throughout Europe, including eastern Europe as a result of its acquisition of the natural gas provider Rurhgas in 2003.

E.ON has not been in successful in all cases where it has tried to expand. In April 2007 E.ON stopped its efforts of over a year and a half to acquire the Spanish utility company Endesa for €42.4 billion. Competing against a Spanish utility corporation and the Italian energy company Enel, which had acquired 46 percent of Endesa, E.ON dropped its bid. In return, it received a promise  that  it could  buy part  of Endesa’s assets worth approximately €10 billion.

E.ON has also drawn the attention of the European Union’s  antitrust   offices. In  June  2008, E.ON  and another  energy company, GDF, were accused by the European Commission of agreeing not to sell energy to each other’s countries. E.ON has denied all accusations and has stated that it will collaborate  with the European  Commission  to resolve the  charges. Further, the company stated that it had invested several billion  euros  in  projects  to  improve  infrastructure that  will carry gas throughout Europe. Additionally, E.ON has been under  a great deal of pressure  from the Commission  to sell part of its infrastructure, the supply grids, to  facilitate cross-border  competition and in 2008 the company announced that it would sell some of its assets. Other charges against the company include accusations that it has withheld electricity in an effort to drive the price up.

The European Commission is not the only organization that has taken issue with E.ON. E.ON has been investigated  by the  German  Government’s  Cartel Office. As a result of the initial investigations, E.ON agreed that it would pay €55 million as refunds to its customers  served by six of its regional companies. In addition, E.ON promised it would not initiate its planned  10 percent  price increases in gas until the end of 2008. In return the Cartel Office stated that it would stop further investigations into E.ON. E.ON’s rationale  was not that  it had done anything  wrong but that it wished to present  legal proceedings  that might go on for a long time and that it preferred  to refund money to its customers  than pay fines to the government.  In November  2008 Germany’s Federal Supreme  Court  issued  an  order  prohibiting  E.ON from increasing the holdings it currently has in municipal  services of German  towns. For 10 years utility companies such as E.ON and RWE had been buying shares in these corporations in response to a loosening of regulations in 1998.

E.ON has also drawn  the  opposition  of environmental groups. As wind farming has not been as successful in Europe as planned, E.ON has commenced the  construction of coal-fired  electrical  generation plants, an action that has resulted in protests.


  1. Victoria Burnett,  “German Suitor  Makes Deal With Rivals and Ends Its Bid for Endesa, a Spanish Utility,” New York Times (April 3, 2007);
  2. “E.ON Banned From Increasing Stakes in Municipal  Services” [BGH verbietet Eon nationale Zukaufe], Europe Intelligence Wire (November 12, 2008);
  3. ON, Corporate Responsibility Report 2007, www.eon-uk.com (cited  March  2009);
  4. ON, www.eon.com  (cited  March  2009);
  5. Simon  Jones,  “E.ON Refunds €55m to Head Off Cartel Probe,” Utility Week (October 17,  2008);
  6. Peter Maloney, “Foreign Firms Envision Wind Farms Dotting the U.S.,” New York Times (November 7, 2007).

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