On March 11, German utility firm E.ON announced it had reached an agreement in principle to acquire innogy from rival RWE.
RWE and E.ON are making these massive reorganizations faced with the rise of wind and solar power in Germany and across Europe, which has undercut the markets and profits for fossil fuels and nuclear power plants.
The aim is for E.ON to focus on the retail, energy networks and customer solutions business, while RWE would take over the renewables power generation of both companies.
RWE would, in turn, gain an effective participation of 16.67 per cent in EON. Goldman Sachs is working for Innogy, sources said. "The CEOs of the energy companies could get nervous with this deal", the person said, adding that the deal would also potentially open up opportunities to snap up assets that RWE and E.ON have to sell to get regulatory clearance for their deal.
Frank Bsirske, head of the Verdi labour union and deputy chairman of RWE's supervisory board, welcomed the deal, saying it offered good prospects for growth and jobs.
Dirty Focus RWE's power generation capacity in Germany in MW as of end-2016 Source RWE sustainability report 2016
Germany's cartel office said it was too early to comment on possible hurdles in the planned asset swap deal, which is expected to involve German and European antitrust regulators. It will also result in E.ON becoming exclusively focused on customer solutions and energy networks, with RWE acquiring E.ON's renewable energy assets.
RWE said its plan is to combine the renewables businesses of Innogy and E.on to establish a greener utility with a broadly diversified portfolio of renewable and conventional power generation assets, which would be linked via its existing trading business.
If approved, the deal would spell the end for Innogy as a standalone company.
Today saw the publication of innogy's full-year results for 2017, reporting a 9% increase in net income to more than €1.2 billion.