EC says yes to RWE, E.on's Innogy-centered asset-swap

Westereems wind farm. Image by: Innogy (www.innogy.com).

September 17 (Renewables Now) - The European Commission (EC) today gave the green light to the final part of the planned EUR-40-billion-plus (USD 44bn) asset swap between German energy groups RWE AG (ETR:RWE) and E.on SE (ETR:EOAN).

Once the whole transaction is completed, E.on will focus on the distribution and retail supply of electricity and gas, and RWE will be mainly engaged in upstream electricity generation and wholesale markets.


The regulator allowed E.on to acquire RWE’s 76.8% stake in Innogy SE (ETR:IGY) on the condition that the buyer exits certain businesses, including Innogy’s electricity and gas retail business in the Czech Republic, and a portion of E.on’s electricity retail business in Hungary. In Germany, E.on will need to part with most of its customers supplied with heating electricity and discontinue the operation of 34 electric vehicle (EV) charging stations on motorways, which will be operated by a new third-party supplier in the future.

“We would have liked to continue these businesses, but we are committed to carry out the measures agreed with the European Commission,” commented E.on CEO Johannes Teyssen, referring to the concessions as “tolerable.”

Margrethe Vestager, commissioner in charge of competition policy, explained that these commitments will ensure the merger will not result in a reduction of choice and higher prices in the above-mentioned countries.

Overall, the EC has concluded that the modified transaction would not raise competition concerns.


After the wide-ranging exchange of assets under the deal, RWE will end up with more than 9,000 MW of installed renewable energy capacity and a 16.7% equity interest in E.on. As agreed, the latter expects to hand over its own renewables division to RWE by the end of September and then follow that with the transfer of Innogy’s renewables business “as soon as possible next year.” Also this month, E.on will transfer its minority stakes in the Gundremmingen and Emsland nuclear power stations to RWE. In addition, next year RWE will get hold of Innogy’s gas-storage business and its stake in Austrian energy company Kelag.

Following these transactions, E.on will receive EUR 1.5 billion in financial compensation from its peer.

RWE said in a statement that it anticipates investing a net EUR 1.5 billion per year in the continued expansion of its renewable energy activities. The “new RWE” will be presented at a press conference scheduled for September 30, 2019.

(EUR 1.0 = USD 1.101)

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