EU approves RWE’s buyout of E.ON’s power generation assets

• 5 years ago (2019-02-28)
• David Flin

Europe 1068 Nuclear 643 Renewables 757

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The European Commission has given approval for German utility RWE to buy E.ON’s renewable and nuclear power generation assets. The acquisition is part of a complex asset swap, which involves RWE buying the majority of E.ON’s green energy and nuclear assets, along with a 16.67 per cent minority interest in the company as part payment for the assets it is selling to the supplier.

Following the deal, RWE will primarily be active in upstream electricity generation and wholesale markets, while E.ON will focus on the distribution and retail of electricity and gas.

The Commission’s assessment focused on Germany, where the main activities of RWE and E.ON’s electricity generation assets overlap. The Commission found that the transaction would not hinder competition in the generation and wholesale supply of electricity, and is “unlikely to affect RWE’s ability and incentives to influence market prices through withholding electricity supply.”

The Commission said: “RWE has a market share slightly above 20 per cent (and approximately 30 per cent in conventional power generation only), but the increment created by the transaction is very small (less than 1 per cent overall, and also less than 1 per cent based on conventional power generation only). In addition, part of the increment would only be temporary in nature since the nuclear capacity transferred to RWE will have to be decommissioned by the end of 2022 at the latest.

The Commission will separately assess E.ON’s acquisition of RWE’s distribution and retail business.