(Rewrites with official confirmation, price, details)
MOSCOW, March 14 Russia's former power monopoly RAO UES EESR.MM confirmed on Friday that Germany's RWE (RWEG.DE) has bought effective control of power generator TGK-2 (TGKB.MM) for 19 billion roubles ($802 million).
Alexander Chikunov, one of UES's top executives, said the price paid was equal to $568 per kilowatt of generating capacity, the terms in which power generators are traditionally valued.
"TGK-2 will receive not less than 9 billion roubles in investments and UES will get close to 10 billion roubles," said Chikunov, who is the head of Business Unit No. 1 at UES, or Unified Energy System.
RWE's junior partner in the acquisition is Russian energy and utilities firm Sintez Group. Investment vehicle Kores-Invest filed the bid on behalf of RWE and Sintez Group.
TGK-2 is selling 440.55 billion new shares and at the same time UES will sell the government's stake in the company.
The price of $568 per kilowatt of capacity is at a premium to the Russian power sector's average of about $500.
But it is dwarfed by the prices paid by other foreign investors in Russia's power sector, such as the $753 per kilowatt that Germany's E.ON EONG.DE paid for OGK-4 OGKD.MM, and the $767 per kilowatt that Finland's Fortum (FUM1V.HE) paid for TGK-10 TGKJ.MM.
State-controlled UES, the sector's Soviet-era monopoly, is selling off all of its assets, including 20 major generating firms known as OGKs and TGKs, as part of a sweeping reform of the power sector.
The sales of TGK-6 TGKF.MM and TGK-7 (VTGK.MM) are set for later on Friday. (Reporting by Olga Popova; Writing by Simon Shuster; Editing by David Holmes)