Germany’s E.On to Buy Britain’s Powergen

German utility E.On said it agreed to buy British rival Powergen for $7.4 billion in a bid to become the world’s second-largest power company and gain a foothold in the U.S. electricity market. E.On will also assume about $6.4 billion in debt from Powergen, Britain’s third-largest power generator. If the plan clears regulatory hurdles, E.On will become a transatlantic giant, with 30 million customers and electricity sales of 323 billion kilowatt hours, moving ahead of American Power Co. and RWE, its main domestic rival. It would trail only France’s Electricite de France. E.On also plans to abandon its chemicals business to focus on its energy operations. The proposed linkup is the latest to reshape the European electricity industry since markets were deregulated about three years ago, spurring utilities to expand abroad as growing competition at home forces down prices. Aside from gaining access to the British market, the deal gives E.On a bridgehead in the United States by way of Louisville, Ky.-based LG&E; Energy Corp., which Powergen acquired in December for $3.2 billion.