German energy giant EON to buy RWE subsidiary Innogy

March 11, 2018
The dea is part of a huge restructuring of Germany's energy market as Europe's top economy switches from conventional to renewab
The dea is part of a huge restructuring of Germany's energy market as Europe's top economy switches from conventional to renewable power

German energy giant EON plans to take over Innogy, the renewables subsidiary of competitor RWE, in a complex deal valued at around 20 billion euros ($25 billion), both companies said Sunday.

The in-principle agreement involving asset swaps is part of a major restructuring of Germany's market as Europe's top economy switches from conventional to renewable power.

The aim is for EON to focus on the retail, energy networks and customer solutions business, while RWE would take over the renewables power generation of both companies.

RWE plans to sell its 76.8 percent stake in Innogy to EON in a deal that includes "a far-reaching exchange of assets and participations", said EON, which also plans a cash offer to the remaining Innogy shareholders.

RWE would, in turn, gain an effective participation of 16.67 percent in EON.

EON would also transfer to RWE most of its renewables business and the minority interests held by its subsidiary PreussenElektra in two RWE-operated nuclear power plants.

RWE would receive the Innogy renewables and gas storage business and Innogy's stakes in the Austrian energy supplier Kelag.

The deal, still subject to antitrust clearances, would also see RWE make a cash payment of 1.5 billion euros to EON.

Following approval of both companies' boards, the deal was expected to be signed shortly, said EON.

Business daily Handelsblatt said that "for decades EON and RWE were bitter rivals. Now they have agreed on a spectacular that will shake up the European energy market."

Germany's has been rapidly transformed since Chancellor Angela Merkel announced a phase-out of nuclear power after Japan's 2011 Fukushima disaster.

Under the country's "energy transition", Germany has raised the share of solar, wind and other renewables to about one third of electricity production.

As wholesale power prices have dropped, the big utilities have been forced into an ongoing process of restructuring.

EON has spun off its fossil fuel operations and invested heavily in renewables, while RWE remains the biggest producer and still operates major coal-fired plants.

Explore further: German energy giant RWE sees coal, gas business shrink

Related Stories

Danish wind power whips up record 43% of electricity

January 11, 2018

Wind power generated 43.4 percent of electricity consumed in Denmark last year, a new record for the Nordic nation which aims to rely on renewables for half of its energy needs by 2030, authorities said Thursday.

Recommended for you

Understanding dynamic stall at high speeds

December 18, 2018

When a bird in flight lands, it performs a rapid pitch-up maneuver during the perching process to keep from overshooting the branch or telephone wire. In aerodynamics, that action produces a complex phenomenon known as dynamic ...

Pushing lithium ion batteries to the next performance level

December 13, 2018

Conventional lithium ion batteries, such as those widely used in smartphones and notebooks, have reached performance limits. Materials chemist Freddy Kleitz from the Faculty of Chemistry of the University of Vienna and international ...

Uber filed paperwork for IPO: report

December 8, 2018

Ride-share company Uber quietly filed paperwork this week for its initial public offering, the Wall Street Journal reported late Friday.


Please sign in to add a comment. Registration is free, and takes less than a minute. Read more

Click here to reset your password.
Sign in to get notified via email when new comments are made.