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

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

German energy company RWE AG (ETR:RWE) on Sunday said it would sell its majority stake in Innogy SE (ETR:IGY) to sector player E.on SE (ETR:EOAN), but it will get the renewables businesses of both firms to create "a leading European utility for renewables and security of supply".

Both companies have had to rethink their business models in recent years, with German Chancellor Angela Merkel championing the pursuit of a low-carbon economy through Germany's "Energiewende" policy.

Should the prospective deal go ahead - the acquisition still needs to be approved by European Union regulators and the companies' respective boards - it would represent a significant shift for both organisations and the German energy sector more generally.

"We assure you that the interests of the employees of our company as well as those of our shareholders continue to be our primary focus", Tigges said.

Eon will receive RWE's 76.8% stake in Innogy.

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"After successful implementation of the transaction it is meant to fully integrate innogy into the E.ON Group", E.ON said in a statement. Eon would transfer to RWE most of its renewables business and minority interests now held by Eon's subsidiary PreussenElektra in the RWE-operated nuclear power plants Emsland and Gundremmingen.

If approved, the deal would spell the end for Innogy as a standalone company.

The deal will transform E.On into Europe's largest electricity retailer and grid operator, while RWE will become Europe's second-largest producer of renewable energy. 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.

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.

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