RWE to acquire Eon's renewables business

  • RWE to acquire Eon's renewables business

RWE to acquire Eon's renewables business

Finally, the agreement provides for a EUR1.5 billion cash payment from RWE to E.ON.

For the transaction to complete, additional conditions are to be met by the companies, including approvals from antitrust and regulatory authorities.

Germany's cartel office said it was too early to comment on possible hurdles in the planned asset swap deal.

"Through the renewable pipeline, RWE, too, should be able to offset its dwindling nuclear and lignite business as well as attract partners for the expansion of its wind business". RWE kept 76.8 percent of Innogy after the 2016 carve-out.

The agreement on Innogy, announced Sunday, transfers "most" of E.ON's renewable business to RWE and the "entire" renewable business of Innogy, though E.ON would be in control of the green entity as its largest stakeholder.

RWE would also become E.ON's biggest single shareholder gaining a 16.7% stake in the company, which already spun-off its conventional power generation, gas and energy trading units as Uniper and sold its stake to Finnish utility Fortum.

"A win-win?" Morgan Stanley suggested in a note, reiterating its "in-line" view of the industry.

The deal, if approved, would spell the end for Innogy as a standalone company. It has been in turmoil since former Chief Executive Peter Terium resigned in December and on Monday said it would cut 400 million euros in costs through the end of 2020.

The source said that E.ON had been in a better bargaining position after RWE shopped Innogy to other European rivals, including France's Engie, Italy's Enel and Spain's Iberdrola, without striking a deal.

Today saw the publication of innogy's full-year results for 2017, reporting a 9% increase in net income to more than €1.2 billion.