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Powergen: the second UK utility to be taken over by a German companySlaughter and May has secured a lead role advising E.ON on its £9.6bn takeover of Powergen, after the German power group’s usual adviser, Freshfields Bruckhaus Deringer, was conflicted out.The instruction arose after Freshfields was retained by longstanding client Powergen to act on the deal.Corporate partner Charles Randell is leading the Slaughters team with Freshfields led by corporate partner Will Lawes. Both firms had been working on the deal for several months before it became public this month.The merger between the two energy giants means Powergen becomes the second UK utility to fall into German hands in less than a year, after Thames Water was taken over by RWE, E.ON’s principal competitor.Slaughters secured a position on the previous instruction, advising Thames Water with best friend Hengeler Mueller Weitzel Wirtz unusually advising the acquirer.The proximity of the two deals poses a problem for Slaughters, as it is doubtful whether they can continue to act for E.ON after the takeover if it covets the role of main adviser to Thames Water/ RWE. Randell told Legal Week: “We were approached by E.ON and the instruction is a one-off conflict referral.”E.ON’s takeover of Powergen, which has been backed by its board, is subject to regulatory approval by the European Union, UK and US authorities.The move is the latest evidence of the consolidation of utilities across Europe, with Italian gas and power group Enel last week confirming an interest in buying the UK’s Southern Water.E.ON and Powergen confirmed that the requisite approvals were likely to be obtained by 2002 and the deal is expected to close in the spring of next year.On the US aspects of the deal, LeBoeuf Lamb Greene & MacRae and Steptoe & Johnson advised E.ON with Sullivan & Cromwell and Jones Day Reavis & Pogue advising Powergen.E.ON has already announced a multibillion-pound program of disposals to help pay for its purchase of Powergen and its Kentucky-based unit LG&E.The disposals will also finance its ambitious US and UK acquisition program while also meeting regulatory requirements. The Powergen acquisition – the biggest purchase in E.ON’s history – makes the company the second biggest energy provider worldwide.

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