The purchase price will depend on the cash held by the company as of December 31, 2009. E.ON said that the German transmission network has an agreed value of EUR885m. The transaction was agreed upon by the two companies after the respective supervisory boards gave their approval for the deal to go ahead.

E.ON has agreed to sell around 10,700km of high-voltage power transmission grid to TenneT with effect from January 1, 2010. The move is said to be part of E.ON’s plan to sell at least EUR10 billion worth of assets to minimise its debt by 2010.

In September, both the companies were in talks over the sale of the network. However, E.ON planed to sell the network to settle a European Union (EU) probe for suspected infringements of EU competition law involving the German electricity markets.

The German regional distribution grids, which form by far the largest part of E.ON’s network business, are not affected by this sale and will remain a part of the infrastructure business managed by E.ON Energie in Munich.

The transaction is still subject to approval by the anti-trust authorities. It is expected to be finalised in early 2010.

Wulf Bernotat, CEO of E.ON, said: “By selling our extra high-voltage transmission network and disposing of 4,800MW of power generation capacity so far, we have almost completely fulfilled our commitment to the EU Commission as given in 2008.

“If the sale of Thuga is also taken into account, E.ON has significantly reduced its position in Germany at all stages of the value chain, namely generation, distribution and sales. At the same time this gives fresh impetus to competition on the German energy market.”

Transpower Stromubertragungs emerged from E.ON Netz in 2009 when the latter was divided into two separate entities to meet the commitment made to the EU Commission. The extra high-voltage transmission network (220/380kV) with a total length of about 11,000km was transferred to transpower.