Westward Expansion
ARNHEM/ESSEN/DUESSELDORF (Own report) - The westward expansion of the Essen based energy giant, RWE, has met resistance. At the end of last week, the parliament of the North-Brabant Province in the Netherlands rejected the takeover of Essent, the leading Dutch energy company, by its German rival. The parliament declared that the nation must maintain control over its energy supplies. At the beginning of the year, RWE and the Essent management reached an agreement on the deal. With the acquisition of Essent, RWE was not only hoping to catch up with the leading German utility company, Eon, but also to strengthen its position in Western Europe - a goal the company has been pursuing for several years. Currently the focus is on the Netherlands, whose economy is closely linked to that of Germany. The German federal land North Rhine-Westphalia, which is also where RWE is located, is seeking to intensify these links through several initiatives. These include a memorandum signed by the government of North Rhine-Westphalia with those of the Benelux countries last December, allowing North Rhine-Westphalian functionaries to work on Benelux expert commissions. Subsequently German personnel will have the chance to directly influence relations between Belgium, the Netherlands and Luxemburg and the enhancement of their already strong alignment with the European hegemonic power.
Platform for Expansion
Last Friday, the parliament of the North-Brabant Province of the Netherlands rejected the takeover of the leading Dutch energy company Essent by the RWE Company of Germany. In January, RWE had reached an agreement with the Essent management on the acquisition and announced it would pay approximately 9.3 bn Euros. With Essent being already active in Belgium, the energy giant RWE is seeking to use the Dutch company as a platform for its further expansion both in the Netherlands and in Belgium. After several Dutch authorities had agreed to the deal, the parliament of North-Brabant Province intervened. The parliament was in a position to intervene, because North-Brabant is with 30 Percent the largest shareholder of Essent. Opponents to the deal argue that only the prevention of Essent's take over by a foreign company will allow the country to maintain control over its own energy supplies. The proponents of the take-over point out that the provincial government in Den Bosch can ignore the elected parliaments vote. The final decision is expected on May 12.
New Focal Point
Resistance in North-Brabant threatens to retard RWE's westward expansion being pursued for several years. Already in 2006, the Essen based energy giant attempted a takeover of Nuon, the second largest energy supplier in the Netherlands - without success.[1] The Netherlands made a vain attempt to merger Essent and Nuon to create its own energy giant.[2] Subsequently RWE started its next takeover offensive - this time aimed at Essent. At present the German company holds a leading position on the energy market in the Czech Republic and Hungary. Poland, Slovakia and Austria are the core areas of its expansion. To the west, RWE has obtained influence mainly in Great Britain, holding third position in the field of electrical power and natural gas supply. The persistent attempt at takeovers in the Netherlands is aimed at strengthening the German position in the Benelux countries. To round it off, RWE is holding shares in a new national electricity and gas company that was established in Luxemburg last January, following the merger of several small enterprises. RWE with approximately 20 percent and Eon, with approximately 10 percent of the shares are securing the German position.[3]
"Seventeenth Federal Land"
Economically, the Netherlands, whose energy sector is the focus of RWE's takeover attempt, is particularly closely linked to Germany. Germany absorbs nearly a quarter of the Netherlands' exports (twice as much as the second receiver nation, Belgium) and delivers around 20 percent of the Netherlands imports (Belgium, also second in line, 11 percent). Last year, according to preliminary calculations, the Netherlands may have bypassed France as the number one German supplier. This is also a result of the importance of the port in Rotterdam, by far the largest seaport in Europe. Rotterdam, sometimes called "the largest German seaport," processes approx. 30 percent more merchandise for Germany than Hamburg. From the perspective of the exceedingly tight economic interdependence, observers call the Netherlands the "seventeenth federal land of Germany," a disdainful categorization that is politely encoded on the German foreign ministry's (German) webpage: "Experts around the world are saying that only the economic ties between the USA and Canada are tighter than those between Germany and the Netherlands."[4]
Benelux Affiliation
Attempts to further intensify links to the Netherlands are being advanced by the German federal land, North Rhine-Westphalia. Among its most recent initiatives is a "memorandum" with which the regional government in Duesseldorf has obtained influence on the Benelux Economic Union. Two years ago, North Rhine-Westphalia initially attempted to obtain the right to directly participate in the Benelux Economic Union Treaty, due to be renewed in 2010. Initially The Hague rebuffed the German bid. But in December 2008, it also had to accept to sign a memorandum alongside the governments of Belgium, Luxemburg and the German federal land of North Rhine-Westphalia. The memorandum provides for close cooperation between North Rhine-Westphalia and Benelux and paves the way for German functionaries to work on Benelux expert commissions - in institutions regulating the relations between Germany's three northwestern neighbors. Since January, their basic rules are being elaborated also with the participation of German personnel and thereby taking German interests into consideration.[5] With its takeover of Essent, at the level of energy supply, RWE could provide a concrete substance to this administrative technical affiliation to Benelux - setting an example for future German westward expansion projects.
[1] see also Geheimprojekt
[2] see also Weak Defense Lines
[3] Neuer Energiekonzern mit RWE und Eon in Luxemburg; Handelsblatt 23.01.2009
[4] Niederlande: Wirtschaft; www.auswaertiges-amt.de
[5] Politische Erklärung der Regierungen der Mitglieder der Benelux und von Nordrhein-Westfalen über die Entwicklung einer engeren Zusammenarbeit. Unterzeichnet auf dem Petersberg in Königswinter am 9. Dezember 2008. "Ein großer Abend für Nordrhein-Westfalen auf dem Petersberg - Vereinbarung mit Benelux sichert Land in Europa neue Chancen!"; www.europa.nrw.de 09.12.2008
