E.ON: to acquire innogy from RWE in a complex deal

(CercleFinance.com) - German energy giant E.
ON has agreed to acquire rival RWE's stake in decarbonised unit innogy through a complex financial structure of assets and participations exchanges.

Under the agreement in principle, which was reached over the weekend, E.ON would receive RWE's 76.8% stake in innogy in return for granting RWE a stake of 16.7% in E.ON.

In a statement, E.ON said the shares would be issued by way of a 20% capital increase.

Furthermore, E.ON plans to transfer most of its renewable energy businesses to RWE, along with the minority interests that are currently held by E.ON's subsidiary PreussenElektra in the RWE-operated nuclear power plants Emsland and Gundremmingen.

Also, RWE would receive the entire innogy renewables business, the innogy gas storage business and innogy's stakes in the Austrian energy supplier Kelag.

The transaction provides for a cash payment of about 1.5 billion euros from RWE to E.ON, E.ON said, with retroactive effect from 1 January 2018.

According to the terms of the deal, E.ON would make a voluntary public takeover offer in cash to the shareholders of innogy at 40 euros per share, compared to a closing price of 35.4 euros on Friday.

This morning innogy shares were up over 15% in Frankfurt, while RWE ordinary shares were up almost 10%, and despite the prospect of a capital increase, E.ON shares were up 9%.

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