E.ON seeks to acquire Innogy’s retail and grid businesses

• 6 years ago (2018-03-13)
• David Flin

Distribution 122 Europe 1088

---

E,ON and RWE have proposed to reshuffle their business units in a complex merger agreement. E.ON is seeking to acquire all 76.8 per cent of RWE’s majority stake in Innogy. E.ON would subsequently return the renewable energy portion of Innogy, along with its own renewable energy assets, representing 16.7 per cent of its equity, back to RWE.

The deal still needs the approval of each company’s supervisory board. The deal values Innogy at about €22 billion, although a source suggested that this amount might be significantly higher when debt and other enterprise value is taken into account.

The agreement proposes to give E.ON the retail and network businesses of both companies, and give RWE the combined renewable generation businesses. This would transform both companies, giving RWE a combined share in wind power second only to Iberdrola in Europe, and giving E.ON a share of the retail market that could raise antitrust implications in Germany and the UK.

Innogy sold 11.3 TWh in the 2017/18 fiscal year, up 5 per cent from the previous year. Of this, 10.2 TWh came from renewables, 74 per cent from onshore and offshore wind, 24 per cent from run-of-river hydropower stations, and 2 per cent from biomass and solar PV plants.