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E.ON to acquire RWE's stake in Innogy in EUR22bn deal

CTBR Staff Writer Published 12 March 2018

German electricity utility company E.ON has reached an agreement to acquire a 76.8% stake in Innogy from RWE in a deal that values the company at €22bn.

In exchange, RWE will receive a stake of 16.67% stake in E.ON.  

RWE said in a statement: "Binding agreements have not yet been concluded. The sale will be performed via a wide-ranging exchange of business activities and participations." 

After the completion of the transaction, RWE is expected to combine ownership of the renewables businesses of E.ON and innogy to create one of the major European utilities for renewables.

E.ON will also make a voluntary public takeover offer in cash to the minority shareholders of innogy. Under the offer, the company will pay a total value of  €40 per share. 

RWE said: "In case the takeover offer would be completed before innogy’s annual general meeting which resolves on the dividend for fiscal 2018, E.ON’s offer would be increased accordingly in order to meet the total value. RWE would not participate in this offer."

However, both the companies are still to approve the transaction.

For the transaction to complete, additional conditions are to be met by the companies, including approvals from antitrust and regulatory authorities.

Under the terms of the transaction, E.ON will transfer most of its renewable business to RWE.

Besides, RWE will receive the entire innogy renewables business, the innogy gas storage business and innogy’s stakes in the Austrian energy supplier Kelag. 

As of January 2018, Innogy had a renewable energy pipeline of more than 5GW. Out of this portfolio, the company has 1.8GW in onshore wind and 1GW in offshore wind in Europe. The capacity is equivalent to powering around 2.5 million homes in Europe.

In October last year, the company became the sole owner of the 860MW Triton Knoll wind farm in the UK after purchasing partner Statkraft’s 50% stake in the project.

Image: E.ON’s building in Essen, Germany. Photo: Courtesy of E.ON SE.