A real revolution on the market of the big German energy companies: E.On and Rwe divide Innogy and thus I end up completing the path started two years ago when Angela Merkel decreed the end of nuclear fission in Germany. In practice, two of the three large groups will remain, each strengthened in its own sector of activity. In fact, E.On and Rwe announced on Sunday that, through an asset swap, they will redesign their industrial and strategic future, focusing respectively on the distribution and sale of energy in the case of E.On and on production in the case of Rwe. The opening of the Frankfurt Stock Exchange proved the deal right, considering that Rwe rises by 8%, E.On by 5,3% while Innogy jumps by 13,5% when the Dax rises by 0,6%.
Going into detail, E.On will acquire 76,8% of Innogy from Rwe - valued at a total of 22 billion euros - by launching a tender offer on the rest of the shares for 40 euros, giving 16,67% of its capital in exchange to Rwe . Furthermore, E.On will transfer to Rwe a large part of its renewables business and the minority shares (held by the subsidiary PreussenElektra) held in the nuclear operators Emsland and Gundremmingen, already controlled by Rwe as well as the "rib" of Innogy which deals of renewables and other minor assets.
In settlement of the entire restructuring, Rwe will pay E.On 1,5 billion. The outcome of the operation will be that Innogy will become a European leader in renewables with Rwe devoted to the production of electricity while E.On will be more focused on the distribution and sale of electricity. Rwe bought Innogy at the time beating its European competitors and in particular the French Engie, the Italian Enel and the Spanish Iberdrola which had come forward on several occasions but without being able to conclude the operation.
The transaction announced on Sunday and which came to the attention of investors with the opening of the Stock Exchange on Monday morning, comes exactly two years after the ban on the nuclear decree by Merkel which forced E.On and Rwe to reconsider their business, hoping own activities among those still linked to the legacy of fossil fuels destined to resize and the more promising ones oriented towards networks and renewable sources.
In January, E.On agreed to sell the remaining 46,65% stake in Uniper (the spin-off into which electricity production plants and trading activities merged in 2016) to the Finnish Fortum: the deal is expected to close in second half of 2018.
