CEZ – Assistance for Acquisition-based Expansion

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ČEZ, a. s Group is an established, integrated electricity conglomerate with operations in a number of countries in Central and South-Eastern Europe and Turkey.  Headquartered in the Czech Republic, its principal businesses encompass the generation, trading, and distribution of power and heat.  ČEZ is the largest electricity producer in the Czech Republic, one of the ten largest energy companies in Europe.  ČEZ shares are traded on the Prague and Warsaw Stock Exchanges.

In 2004, after a successful acquisition in Bulgaria, ČEZ established their interest in acquisitions in the energy sector in other Eastern European countries.  They entered the privatisation process of Electrica SA lacking the understanding of the Romanian system.  Even though they were using the services of a reputable investment bank, they contracted our services to help in the process.

The business challenge related to the particularities of the privatisation program in Romania.  Our mission was to help ČEZ understand this program and the associated decision making mechanisms.  We were also tasked to help ČEZ’s representatives become familiar with the power system in Romania: how it works, who the main players are and, most importantly, what state-owned assets in the power sector might be offered for sale.

Drawing upon our expertise, local knowledge and business connections, we provided ČEZ with a comprehensive study on the most suitable assets for acquisition.  Besides granting them an understanding of the privatisation process in Romania, we helped ČEZ identify and select the right assets for further acquisitions.

As part of our assignment, we organised various meetings between ČEZ representatives and relevant people dealing with state-owned assets in Romania.  We helped ČEZ increase their brand awareness and broadcast the seriousness of their intentions.  This, in turn, led to their winning bid for the privatisation of Electrica Oltenia, one of the major electricity distribution companies in Romania.  This was the first step to ČEZ’s expansion into Romania.  Furthermore, ČEZ acquired the Resita hydro-energetic complex in 2010, and the Fântânele and Cogealac wind farms, with a total installed power of 600 MW.