Telephone Conference on the Acquisition of Shares in ... - e.on AG

							Telephone Conference on the Acquisition of Shares in OGK-4



Düsseldorf, September 17, 2007




Presentation by:
D r. W u l f H . B e r n o t a t
Chairman of the E.ON AG Board of Management and CEO




Please check against delivery
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Presentation by Dr. Wulf H. Bernotat




Ladies and gentlemen, welcome to today’s telephone conference. The
occasion is a very happy one. On Friday evening, RAO UES, Russia’s
state-owned holding company for its electricity interests, informed us
that we submitted the best bid for the 47-percent stake in OGK-4
being sold by RAO UES. OGK-4 is one of six Russian operators of
large-scale generating facilities currently being privatized. This
represents a large and important step towards our entry into the
Russian electricity market, one of the world’s biggest and fastest
growing. As you know, it was only in late May of this year, as were
presenting our €60 billion investment offensive, that we first
announced concrete plans to enter the Russian market. I’m therefore
very proud that after just a few months we can already announce a
major success in this area, as well. E.ON is already the best-positioned
energy company in Europe. Now we can significantly extend this
position. Our team did an excellent job in a very short time, and I’d
like to take this opportunity to thank everyone involved.

Of course, the announcement that we submitted the best bid isn’t the
end of this process, which RAO UES has conducted in a very
professional manner. So far, we’ve only been informed that we
submitted the highest bid for the approximately 29 billion OGK-4
shares being sold by RAO UES. On Saturday, OGK-4’s Board of
Directors set the subscription price for the upcoming capital increase
of roughly 23 percent. This subscription price is the same price that
E.ON bid for the OGK-4 shares held by RAO UES. In the next few
days, E.ON intends to issue a firm bid for the shares offered in the
capital increase. This would be the second step of the transaction.

The final decision won’t come until the end of this month when the
shares from the upcoming capital increase are also placed. If our
second bid is also successful, we would have a roughly 70-percent
stake in OGK-4. The total price is expected to be about €4.1 billion. I
might add that this investment meets our strict strategic and financial
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Presentation by Dr. Wulf H. Bernotat




criteria. Under Russian securities law, if we complete the acquisition
of the shares, we must make a public tender offer to OGK-4’s minority
shareholders. RAO UES has announced that it won’t sell its remaining
shares in the mandatory public tender and, at the conclusion of the
transaction, would therefore retain a 23-percent stake in OGK-4.

As you can see, it’s a complex process that will take some time.
Nevertheless, we’d like to provide you with a quick overview of our
involvement in OGK-4 and our view of the Russian electricity market.

Russia’s electricity market is one of the world’s largest and fastest
growing, with an annual growth rate of about 5 percent. Moreover, it’s
estimated that Russia’s electricity industry will require investments of
more than $120 billion between 2006 and 2010. This will involve not
only the modernization of power stations and transmission systems.
Russia urgently needs to build new generating capacity to meet its
growing demand for electricity.

RAO UES, Russia’s state-owned holding company for its electricity
interests, and the Russian government therefore initiated steps to
liberalize the country’s electricity market. These steps include the
privatization of 18 large power and heat generation companies (such
as OGK-4) and the introduction of a largely deregulated wholesale
power market.

In this attractive market environment, OGK-4 is a very interesting
investment. It has modern power plants at excellent locations.

•   OGK-4 currently operates four large gas-fired power plants and
    one coal-fired plant with an aggregate installed capacity of
    approximately 8.6 gigawatts, which is equal to roughly 6 percent
    of Russia’s thermal generating capacity. For comparison, OGK-4’s
    generating capacity is only slightly less than that of U.K., one of
    our larger market units. By 2011, OGK-4 plans to build additional,
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Presentation by Dr. Wulf H. Bernotat




    technologically advanced power plants with a total capacity of 2.4
    gigawatts at its existing facilities. This would give us a superb
    platform for organic growth in a market with an almost unrivaled
    appetite for electricity.

•   The high gas component (currently about 80 percent) of OGK-4’s
    fuel mix is typical of all Russian operators of large-scale power
    plants. However, the Russian government is determined that this
    will soon change. Over the medium term, we’d have a better fuel
    mix, which would enable us to make more sensible use of valuable
    natural gas than burning it to generate electricity.

•   Eighty-three percent of OGK-4’s generating capacity is in the
    Europe/Urals region in which load growth is expected to be
    particularly strong due to increasing demand from basic and heavy
    industry. This, too, demonstrates that we’re not just acquiring a
    good company, we’re also BLAHING growth potential.

•   OGK-4’s power plants are about 30 years old on average, which
    makes them significantly newer than those of other Russian energy
    companies. Its utilization factor is 68 percent, by far the best in
    Russia. It also has the highest efficiency compared with its peers.

•   Last but not least, OGK-4 has a strong management team which
    has done a good job of preparing the company for competition in a
    liberalized electricity market. We look forward to working with
    them.

In summation, the acquisition of OGK-4 would be an important aspect
of our entry into the Russian electricity market and an important step
for the further growth of our company. We see ourselves as a strategic
investor with a long-term approach. We want to work with OGK-4’s
management to successfully position the company in liberalized
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Presentation by Dr. Wulf H. Bernotat




market of the future and ensure further growth by implementing the
company’s substantial program to build new power plants.

As you can see, we’re making rapid progress in implementing our
strategic initiatives. We’re working hard to achieve our growth targets,
enhance our performance, and tap new growth markets like Russia.

Thank you for your attention. We’d now be happy to answer your
questions.




This document may contain forward-looking statements based on current
assumptions and forecasts made by E.ON Group management. Various known and
unknown risks, uncertainties and other factors could lead to material differences
between the actual future results, financial situation, development or performance of
the company and the estimates given here. These factors include those discussed in
our public reports filed with the Frankfurt Stock Exchange and with the U.S.
Securities and Exchange Commission (including our Annual Report on Form 20-F,
in particular to the discussion included in the sections entitled “Item 3. Key
Information: Risk Factors,” “Item 5. Operating and Financial Review and
Prospects,” “Item 11. Quantitative and Qualitative Disclosures about Market Risk”).
The company assumes no liability whatsoever to update these forward-looking
statements or to conform them to future events or developments.