February 26 (Renewables Now) - The European Commission (EC) today gave the green light to RWE AG’s (ETR:RWE) planned acquisition of the renewable and nuclear power generation operations of E.on SE (ETR:EOAN).
The EC said in a statement that the pending transaction is not likely to hinder effective competition in the generation and wholesale supply of electricity or affect RWE's ability and incentives to influence market prices. It added that the buyer will continue to face effective competition on the markets for generation and wholesale supply of electricity.
The two German companies are swapping assets as part of a complex deal agreed in March 2018 that also involves Innogy SE (ETR:IGY), which is currently majority owned by RWE. As part of that deal RWE will sell its majority interest in Innogy to E.on, while keeping Innogy’s renewables business and merging it with the green assets of E.on. The move will give RWE ownership of an 8.6-GW renewable energy portfolio that will be housed in a new company with three operating divisions.
At the same time, RWE will get a 16.67% minority interest in E.on and the latter will take possession of RWE’s distribution and retail business, a move that is currently being reviewed by the commission.
The EC noted that after all asset transfers RWE will be primarily active in the upstream power generation and wholesale markets, while its peer will concentrate on the distribution and retail of electricity and gas.
RWE said previously that its goal is to close the transactions in the second half of the year. Upon completion, the group will be focused on renewables and about 60% of its overall generation portfolio will produce power with low or zero carbon dioxide (CO2) emissions.