E.ON SE, the German utility, agreed to acquire Innogy SE, the renewable energy business of German rival RWE AG in a €43 Bn deal, transforming the country’s energy industry. In a complex transaction involving share and asset swaps, E.ON will emerge with the retail and network businesses of both companies, while RWE will end up owning the combined renewable-generation businesses as well as a large stake in E.ON.
The agreement sees E.ON acquiring all of RWE’s 76.8% stake in Innogy, giving RWE 16.7% of E.ON’s equity in return. Additionally, RWE will end up with E.ON’s minority stakes in two nuclear power plants, Innogy’s gas storage business and Innogy’s stake in an Austrian energy supplier. The deal combines three relatively small businesses into one of the largest grid and utility players in Europe while also creating a major generation company with a strong renewables portfolio.
E.ON is Germany’s biggest investor in renewable energy, with more than €10 Bn in wind, solar and storage, while RWE is the country’s biggest power producer, though heavily focused on conventional sources. Innogy had sought to broaden its global footprint, with wind and solar assets that stretch from the U.S. to Australia.
