The European Commission has approved the acquisition by Eon of Innogy’s distribution and retail business, paving the way for a complex asset swap between the former and the latter’s owner RWE to go ahead.
The Commission had approved the acquisition by RWE of certain generation assets owned by Eon in February, including renewables, but investigated the retail side of the deal over concerns that it may reduce competition in several EU markets.
Following the investigation, the Commission concluded the deal would not result in significant loss of competition in Germany, nor would the two companies increasingly compete against each other in Slovakia as a result of the transaction.
In Hungary and Czechia, Eon committed to divest its retail businesses, satisfying Commission concerns.
RWE chief executive Rolf Martin Schmitz (pictured) said: “Today, Brussels paved the way for the ‘new RWE’.
“This makes us one of the world’s leading renewable energy companies. We intend annual net investments of €1.5bn to consolidate and further strengthen this position. Now we are putting all our energy into tackling this task.”
RWE said the transaction will be concluded in two steps.
First, RWE will transfer its 76.8% stake in Innogy to Eon. In exchange, RWE will receive an equity interest of 16.7% in Eon and a seat on the latter’s supervisory board filled by Schmitz.
All of Eon’s key renewables activities and minority interests in the Emsland and Gundremmingen nuclear power stations will be transferred to RWE as of 30 September 2019.
Subsequently, Innogy’s entire renewable energy business, gas storage business and stake in Austrian utility Kelag will come to RWE as “quickly as possible next year”, RWE said.
Eon will also receive financial compensation worth €1.5bn from RWE.
Schmitz said: “Throughout its corporate history, with a pedigree of more than
120 years, RWE has repeatedly proven that we are capable of driving new developments in energy markets and bringing innovative technologies to market.
“This is the energy, experience and determination with which we are writing a new, exciting chapter in our company’s history.”
He will present the ‘new’ RWE at a press conference on 30 September, the company said.