E.ON agrees to acquire Innogy from RWE in €43bn deal

Reuters  Thilo Schmuelgen

As first reported by Bloomberg, E.ON is seeking to acquire all 76.8 percent of RWE's majority stake in Innogy, the company it created in 2015 from its renewable generation, grid and energy retail businesses across Europe.

The asset swap deal by Germany's top utilities to divide assets of renewable energy provider Innogy could make the sector more competitive, Economy Minister Brigitte Zypries said on Monday, signaling Berlin's support for the agreement.

In a letter to staff seen by Reuters, Innogy interim Chief Executive Uwe Tigges said Innogy's management and supervisory boards would thoroughly assess the planned deal, which was agreed in principle and still requires antitrust approval.

It would leave E.ON operating primarily as an energy networks and retail specialist, with RWE significantly strengthening its position in the renewables and clean energy generation markets.

By contrast, E.ON split its conventional assets as Uniper and is in the process of selling its 47% stake to Fortum, but will continue to maintain its legacy nuclear plants in Germany under its Preussen-Elektra unit. Business daily Handelsblatt said that "for decades EON and RWE were bitter rivals".

Germany's power companies are reshaping as they look to boost green energy output, shift away from fossil fuels and prepare for Germany's exit from nuclear power in 2022. Innogy had been an investment target of interest for other European utilities including Engie, Enel and Iberdrola. As a result, it does not believe the E.ON deal with RWE will affect its own merger. "Through this transaction E.ON would become a focused customer-oriented energy company concentrating on energy networks and customer solutions". Chief executive Peter Terium resigned late past year in the wake of a profit warning leaving Uwe Tigges as interim CEO.

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