RWE’s exit from American Water

What is it?

The sale of the remainder of RWE’s stake in American Water Works, which was completed in November 2009. American Water is now 100% publicly traded on NYSE.

Who is responsible?

BofA Merrill Lynch, Credit Suisse and Morgan Stanley acted as lead underwriters on the offering.

What makes it special?

• RWE’s exit from American Water’s share capital finally removed the stock overhang which had hampered the share price performance since the IPO in 2008. Investors appreciated the move, with the shares ending the year more than 7% up.

• After enduring years of rate stay-out clauses, the return to 100% public ownership will allow American Water to move closer to earning its authorised rates of return on the systems it owns.

• The staggered exit by RWE allowed American Water to raise $250 million through a parallel offering of new equity in August - sending an important message to the market that the company has access to capital for future investment. The offering was the largest by an investor-owned water utility in the US last year.