STOCKHOLM (Standard&Poor's) Dec. 13, 2004--Standard&Poor's Ratings Services said today that the agreement between Danish energy companies DONG A/S (A-/Stable/A-2) and Elsam A/S (A-/Stable/A-2) to merge has no immediate ratings implications. The agreement assumes a purely share-based transaction, apart from a potential, limited cash acquisition by DONG of up to 16% of Elsam shares before the merger, at a total cost of up to Danish krone 3 billion ($533 million). The new company would combine DONG's strong, integrated gas operation with Elsam's large electricity operation, creating a strong incumbent energy company with considerable synergy potential. Via the merger, DONG will accomplish its targeted electricity diversification strategy. Such a merger has already been factored into the DONG rating.
