The Extraordinary Shareholders Meetings of Hera S.P.A and Meta S.P.A Approve the Merger

press release

Bologna, 23/09/2005

The Extraordinary Shareholders’ Meetings of Hera S.p.A and Meta S.p.A approve the merger project, the first of its kind among listed multi-utility companies in Italy.

Following the merger, the Hera Group will become the second largest operator in the sector, with sales of approximately Euro 1.8 billion.

The Shareholders’ Meetings of Hera S.p.A. and Meta S.p.A., held today in an extraordinary session in Bologna and Modena, respectively, approved the merger by integration of Meta S.p.A. into Hera S.p.A.

The Shareholders’ Meeting of Hera S.p.A. also approved the capital increase in relation to the merger, from the current Euro 839,903,881 up to a maximum of Euro 1,061,485,109, through the issue of a maximum of 221,581,228 ordinary shares, with a par value of Euro 1 each.

In addition, the Meta integration involves the launch of a partial takeover bid on ordinary shares representing 29% of the share capital of Meta, to begin on October 31 and end on November 22, 2005, as indicated in the offer document published September 16, 2005.

The agreement for the merger of Meta into Hera will be signed on November 29, 2005 and will involve a share swap of Meta shares, with 1.286 Hera shares for each Meta share.

Following the integration of Meta S.p.A., the Shareholders’ Meeting also approved an increase in the number of members of the Board of Directors of Hera S.p.A., from 14 to 18, with the arrival of 3 new directors as representatives of Meta’s public shareholders and 1 additional director for its private shareholders.

The effects of the merger include the establishment, from January 1, 2006, of a Local Operating Company, with head office in Modena, which will be responsible for guaranteeing the operational activity in the region, encouraging integration and development of synergies in accordance with the model already adopted for Rimini, Ravenna, Forlì/Cesena, Imola/Faenza, Bologna and Ferrara.

The Plant development, Engineering and Electricity Network Division will also be based in Modena, enhancing Meta’s know-how in this specific field and assigning an important role to the Modena market as part of the Hera Group’s development process.

The merger, effective for fiscal and accounting purposes as of January 1, 2005, will result in a single operator with sales of approximately Euro 1.8 billion, a gross operating margin of over Euro 360 million and a potential for new synergies estimated at Euro 160 million, all based on 2004 figures.

Following integration of the complementary activities of the two companies, the Hera Group will rank second among listed multi-utility companies on a national level and will attain about 70% coverage of the market in the Emilia Romagna region.

“The Hera/Meta merger – declared Tomaso Tommasi di Vignano, Chairman of the Hera Group – has an even more significant value compared to previous ones, since it is the first merger between listed utilities companies in Italy, and it is being carried out in record time. Furthermore, this deal is the evidence of the Group’s dynamic nature and of its capacity to concretely and quickly implement the guidelines of its strategic business plan in terms of growth, taking advantage of the best opportunities for expansion and development of synergies offered by the market, which Hera has pursued since its very incorporation.”

“I am very pleased with the upcoming merger”, said Giulio Sapelli, Chairman of Meta – “which is taking place under conditions of total transparency via a takeover bid that aims at satisfying the requirements of public entities as well as those of private shareholders, even minority ones, a confirmation of the excellent governance policy to which we adhere. Meta and the Modena area have just as much to gain from the merger by incorporation, given the assignment to Modena of activities for the coordination of Electricity Networks and management of Engineering and Plants development for the entire Group“.