In a surprise move, Mirant has decided to end its part-ownership of Bewag and sell its 44.8 per cent share for 3 550 million DM to Vattenfall, which on completion will own 89.6 per cent of the Bewag shares.

This will finally enable Vattenfall to form what will be the third largest German energy group with HEW, Bewag, Veag and Laubag.

Formation of the new group had been thought unlikely after a long period of negotiations between Mirant and Vattenfall ended in disarray following fundamental disagreements about the nature of the future partnership.

The deal has still to be licensed by the Federal Cartel Office which will, however, probably agree. The new company, which currently operates under the working title Neue Kraft (New Power) will have nearly 17 000 MW of installed power plant, 23 600 employees and annual electricity sales of 97 500 million KWh.