RWE To Sell 76.8% Stake In Innogy To E.ON & Buy Into E.ON

The Germany-based utility company RWE has agreed to sell its 76.8% stake in Innogy to the utility company E.ON, as part of a broader deal that will see RWE acquire a minority stake in E.ON and begin managing the renewable energy businesses of both Innogy and E.ON.

The deal will see E.ON focus entirely upon its regulated energy networks business and customer service aspects, and RWE manage the combined renewables businesses of both (essentially).

The deal follows from the broader restructuring of the German electric utility industry over the last few years, which accompanied the decision to rapidly transition away from nuclear energy in the wake of the Fukushima nuclear disaster, among other things.

Reuters provides more:

“Through the takeover, which includes shares and asset swaps…The deal would be implemented in several steps, both companies said, adding that it required the approval of their boards, and of anti-trust and regulatory authorities.

“Innogy, a network, renewable, and retail energy utility, has been in turmoil since Chief Executive Peter Terium resigned in December and Chief Financial Officer Bernhard Guenther fell victim to a recent acid attack.

“E.ON would make a voluntary cash takeover for RWE’s Innogy stake valued at €40.00 per share, E.ON said in a filing issued in the early hours of Sunday. Innogy shares closed at €34.53 on Friday. This price includes an offer of €36.76 per share plus assumed dividends of Innogy SE for the fiscal years 2017 and 2018 in the total aggregate amount of €3.24 per share, E.ON said. RWE will not participate in the offer.

“As part of the deal, E.ON would undertake a 20% capital increase so that RWE can buy a 16.67% in E.ON. E.ON will issue shares from authorized capital while RWE will make a cash payment to E.ON of €1.5 billion, E.ON said.”

Accompanying all of this, RWE will be receiving the renewables businesses of E.ON, and RWE will also receive the renewables and gas storage businesses of Innogy (including the stake in Austria’s Kelag.

Altogether the deal could be seen as a move to concentrate much of the utility company affiliated renewable energy capacity in Germany into one company, RWE. It’ll be interesting to see what might come of that — presuming that the deal goes through.