back 
Sale of German gas transmission grid.
At the end of May 2008, we reached an agreement with the EU Commission on a solution to the antitrust abuse proceedings against RWE Transportnetz Gas GmbH, which have been ongoing since April 2007. We committed to selling our German gas transmission grid to a third party which is independent from RWE. In exchange, the EU would stop the proceedings. The Commission conducted an investigation against RWE on grounds that it suspected unjustified barriers were put in the way of gaining access to the German gas transmission system. The envisaged settlement is not an admission of guilt. We remain convinced that we have complied with the statutory regulations in the gas business, but we want to avoid protracted litigation. In December, we made an official commitment to sell our gas transmission grid. The EU Commission is expected to declare the commitment binding in the spring of 2009 and stop the proceedings. Our gas transmission grid has a length of approximately 4,100 kilometres. In 2008, we generated €185 million in total revenue from the activities that are up for sale.
RWE reaches agreement with former VEW shareholders.
RWE reached an agreement with former VEW shareholders in conciliation proceedings before the Dortmund Regional Court underway since the end of 2000. They had filed a lawsuit on grounds that they believed that the share conversion ratios for the merger between RWE and VEW were inappropriate. On the court’s recommendation, the suit was ended via a settlement on December 22, 2008. VEW shareholders will receive compensation from us exclusively consisting of RWE shares in the first quarter of 2009. The compensation amounts to €10.39 per VEW share with a nominal value of DM 50, plus a reimbursement for interest. To qualify for the compensation, individuals must have held VEW shares when the merger became effective (November 24, 2000). Excluding the interest reimbursement, the compensation totals €130 million. The goodwill carried on our balance sheet has increased by this amount. The interest claim reduced our financial result by €46 million. Both of the effects have already been included in the financial statements for 2008. The Executive Board of RWE AG decided to purchase RWE common shares to the value of up to €180 million between January 29, 2009, and February 28, 2009, in order to make the settlement. In the same period, we are selling RWE common treasury stock–also to a value of up to €180 million. By conducting this share buyback, we are applying Sec. 71, Para. 1, Item 3 of the German Stock Corporation Act (AktG), which authorizes companies to conduct share buybacks in connection with company transformations, analogously. The existing authorization for share buybacks by the Annual General Meeting did not include this use.
