RWE AG and OAO Gazprom, the world’s gas producer, ended talks to create a joint venture to build and operate power plants in Europe after failing to agree on a deal. “Although our discussions were conducted in a very constructive manner we were unfortunately not able to agree on a framework for cooperation which would be sustainable for both parties,” Juergen Grossmann, chief executive officer of RWE, Germany’s second-largest utility, said today in a statement. Gazprom had stalled on talks to form its first power generation venture in western Europe with RWE because of deteriorating profits in Germany, two people with knowledge of the matter said earlier this month. In July, the companies said they were entering exclusive talks, which were extended in October to the end of this year. “Both sides probably thought, what’s the point?” Derek Weaving, a utilities analyst at Renaissance Capital in London, said by phone. “Given that Gazprom has a high cost of capital and western energy markets are very tight, I couldn’t see what was in it for them.”
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