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RWE AG (RWE-FF)/American Water Works (AWK) |


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WIKI ANALYSISIn 2003, a German utility company (RWE) purchased American Waterworks as they attempted to break into the US water utility market. The plan was to implement cost controls and thereby reduce expenses in order to recognize greater profits. What ended up happening was a mismanagement of the firm resulting in tense relationships with regulators across the country, and a company with significant needs for capital expenditures in order to strengthen the utility’s infrastructure. In late 2005 began the process of instituting new management in preparation for a divestiture of the business.
As reported in the 2009 annual report, American Water is still saddled with $1.2 billion in debt from RWE's acquisition.



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