German energy group RWE AG announced that it has filed with the European Commission (EC) its planned acquisition of the renewable energy business of both E.on SE (ETR:EOAN) and Innogy SE.
The landmark deal between German utilities Eon and RWE was signed in March 2018, RWE agreed to 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 filing is the first step of a diverse merger control procedure, which is necessary due to the substantial asset swap between RWE and E.ON. The filing occurs following a pre-investigation by the European Commission lasting several months.
Such a pre-investigation is customary in merger control procedures and enables the Commission to gain an accurate picture of the effects of a transaction on the competition in the relevant markets.
Within the transaction RWE will get the renewable energy businesses of E.ON and innogy. Additionally, E.ON’s minority interests in the Emsland and Gundremmingen nuclear power stations operated by RWE as well as innogy’s gas storage business and its stake in the Austrian power utility Kelag will be transferred to RWE. In addition, RWE will acquire a 16.7 % equity interest in E.ON.
RWE will file the mentioned acquisition of the 16.7 % shareholding in E.ON with the German and British cartel authorities in due course as well. The same applies to the acquisition of the US assets in the USA where the relevant US competition authorities will be notified. This will happen in the first half of the year.
The objective is to complete the transaction between RWE and E.ON announced in March 2018 in the second half of 2019.
It was only last week that RWE published the cornerstones of RWE’s renewables strategy as well as the staffing of the future management team.
On completion of the transaction, RWE will become a global renewables player. 60 % of RWE´s generation portfolio will then produce electricity with low or zero carbon dioxide emissions. The declared goal is to continue expanding this business on a global scale and spend up to 1.5 billion (net) annually for this purpose.