Strategic stake sale in Lübeck utility fails at final stage – STAWAG secures Dong shares

HKCF acted as exclusive M&A advisor to Stadtwerke Aachen Aktiengesellschaft (STAWAG)

A high-stakes municipal transaction has come to a close: efforts by Stadtwerke Lübeck to exercise their pre-emption right and reacquire a 25.1% stake in their company from Dong Energy (now Ørsted) ultimately failed due to the veto of the Kiel municipal supervisory authority. The €42.3 million acquisition offer was blocked just hours before the legal deadline, citing unresolved concerns about the financial viability of the proposed funding structure.

The shares have now been awarded to Stadtwerke Aachen AG (STAWAG), who matched the offer and will proceed with the acquisition, pending antitrust clearance. “We are confident we can demonstrate the strategic benefits of our partnership to the city and the local utility,” said Dr. Christian Becker, CEO of STAWAG. “We remain fully committed to the value-added proposals we have made, particularly in the area of renewable energy project collaboration.”

The process leading up to the failed reacquisition attempt by Lübeck was marked by intense negotiations. Despite political and public support, the Kiel authorities — backed by multiple assessments from accounting firm BDO — concluded that the financing plan submitted by Stadtwerke Lübeck did not sufficiently ensure the sustainable serviceability of the debt. Stakeholders and city council members expressed frustration at the outcome, with some calling it a “serious blow to municipal self-determination”. However, critics, including members of the local opposition and fiscal watchdogs, welcomed the decision, citing the city’s debt burden and execution risks.

STAWAG, fully owned by the City of Aachen, employs around 635 people and serves approximately 139,000 electricity customers. In 2011, it reported €38.8 million in pre-tax profit. The company has reaffirmed its commitment to invest in joint renewable energy initiatives with Lübeck. The transaction is now subject to the seller’s formal acceptance and subsequent merger control clearance.

Josephine von Zastrow and Kai Dordowsky

Source: Lübecker Nachrichten