E.on closes EUR-5bn debt to back Innogy acuiqisition

German utility E.on SE (ETR:EOAN) said on Monday it has closed the syndication of EUR 5 billion (USD 5.88bn) of acquisition financing for the voluntary public takeover offer of renewables-focused utility Innogy SE (ETR:IGY).

The syndication comes after earlier this year E.on agreed to buy a 76.8% interest in Innogy from the latter’s majority owner RWE AG (ETR:RWE) and then kicked off a voluntary public takeover offer of EUR 38.40 per share for the remaining shareholding.

The newly-arranged financing will consist of a EUR-3-billion bridge loan and a term loan of EUR 2 billion, maturing in five years. According to the press statement, the syndication was substantially oversubscribed and included E.on’s core relationship banks. They took part with a ticket of EUR 400 million each, the utility said.

Before the syndication, the financing commitment was provided by BNP Paribas (EPA:BNP) as sole underwriter.

As previously announced, the complex transaction between E.on and rival RWE also includes far-reaching exchange of assets, as part of which RWE will get substantially all of E.on's renewables activities, including Innogy's own renewables business, and a 16.67% stake in E.on. In respect to the voluntary takeover offer, Innogy said last month that its executive and supervisory boards have decided not to issue any recommendation as they were unable to definitively assess the relative value of the bid at that point.

(EUR 1.0 = USD 1.176)

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