Germany

Germany

Commission clears RWE-E.on deal

The European Commission (EC) has given final approval to the asset swap deal that paves the way for German utility RWE to hold a 9GW-plus renewables portfolio and E.on to grow its distribution and retail businesses.

RWE plans to add 2-3GW of new renewable energy capacity per year following completion of the deal (pic credit: Lutz Kampert)
RWE plans to add 2-3GW of new renewable energy capacity per year following completion of the deal (pic credit: Lutz Kampert)

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It had already approved RWE’s acquisition of renewable assets from Innogy and E.on in February, but investigated whether E.on acquiring retail assets would reduce competition in various EU markets.

The EC’s approval allows integration of the restructured companies to begin, with E.on’s takeover of RWE’s 76.8% stake in Innogy expected tomorrow (18 September).

EC granted the merger on the condition that E.on exits part of its electricity retail business in Hungary and all of Innogy’s electricity and gas retail business in the Czech Republic.

Under the deal announced in March 2018, RWE will receive the renewable assets and gas storage businesses of its subsidiary Innogy, as well as those of E.on.

It will also receive Innogy’s 12.85% stake in Austrian energy company Kelag and minority stakes in the German nuclear plants, Gundremmingen and Emsland. 

Meanwhile, E.on will buy 86.2% of Innogy and its grid and retail business — though including shares acquired on the market in recent months, E.on will actually hold 90% of Innogy shares.

In return, RWE will acquire a 16.67% "effective participation" in E.on, with its CEO Rolf Martin Schmitz to sit on E.on’s expanded, 20-member supervisory board.

RWE is due to receive E.on’s renewable energy and gas storage assets by the end of September, followed by those of Innogy in early 2020, it stated. The utility will also pay E.on €1.5 million in compensation as part of the deal.

Once the deal is completed, RWE will have a renewables portfolio of more than 9GW, the company stated. It plans annual investments of €1.5 billion and new renewable energy capacity additions of between 2GW and 3GW.

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