German utility E.ON AG (EOAN.XE) said Thursday it has agreed to swap assets with Electricite de France SA (EDF.FR) and EnBW Energie Baden-Wuerttemberg AG (EBK.XE), bolstering its position as France's third largest power company.

Under the deal E.ON will receive 800 megawatts of nuclear power capacity in France from EnBW. Germany's largest utility by market value and sales will further acquire the 35% stake it doesn't already own in SNET from EDF and Charbonnages de France (CHF.YY), making it the sole owner of SNET.

EnBW will receive nuclear power drawing rights from reactors in Germany. On top, it will also acquire E.ON's 50.4% stake in a coal-fired power plant in Rostock, which reflects a power generation capacity of 256MW, and 159MW in drawing rights from the Buschhaus coal-fired power plant.

The completion of the transaction is still subject to approval of the companies' supervisory boards and antitrust authorities, E.ON said.

"By fully taking over SNET we are now able to better bundle our activities in France and tap valuable synergies," E.ON Chief Executive Wulf Bernotat said in a written statement.

E.ON acquired 65% in SNET in 2008 after its failed bid for Spain's Endesa SA (ELE.MC). SNET was previously owned by Endesa but Italy's Enel SpA (ENEL.MI), which beat E.ON in the race for control of Endesa, sold SNET and other assets in Italy and Spain to the German company.

Thursday's asset swap with EDF and EnBW is part of a deal E.ON struck with the European Commission in 2008. At the time, E.ON committed to selling 5 gigawatts of power generation capacity and its German power transmission grid. In return, the E.U. dropped two antitrust cases against the company.

By swapping assets with EDF and EnBW, E.ON has now divested more than 4.4GW of generation capacity, the company said.

The E.U. had targeted E.ON over concerns that the German utility was abusing its dominant position in the German power generation and electricity grid market.

At 0844 GMT E.ON shares traded flat at EUR28.98 in line with a flat German bluechip index DAX.

Company Web sites: www.eon.com; www.edf.com; www.enbw.com

-By Jan Hromadko, Dow Jones Newswires; +49 69 29 725 503; jan.hromadko@dowjones.com
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