Private equity houses have emerged as the most likely bidders for Ruhrgas Industries, a gas and electricity metering subsidiary of E.On, the German utility giant, in a transaction that could be valued at up to €1.3bn ($1.6bn).

Deutsche Bank has won the mandate to sell Ruhrgas Industries in a competitive auction scheduled before the end of this year. The size and European reach of the subsidiary is expected to create regulatory problems which would rule out rival bids from trade buyers.