German electricity utility company E.ON has entered into an agreement in principle to acquire RWE’s 76.8% stake in Innogy energy firm.
Under the agreement, E.ON will acquire the share in Innogy through an exchange of assets and participations.
The deal will see RWE receive a 16.67% stake in E.ON as well as the transfer of its renewables businesses. Additionally, E.ON has agreed to transfer a minority stake held by its subsidiary PreussenElektra in Emsland and Gundremmingen nuclear power plants, currently being operated by RWE.
There will also be a transfer of Innogy’s stakes in the Austrian energy supplier Kelag, as well as renewables and gas storage businesses to RWE. The transfer of businesses and participations will be calculated from 1 January 2018.
E.ON will receive a cash payment of €1.5bn from RWE as part of the contract.
The utility company is planning to announce a voluntary public takeover offer in cash to the shareholders of Innogy. Upon completion, Innogy will be fully integrated into the E.ON Group, which is set to become a customer-orientated energy company and focus on energy networks and customer solutions.
The renewables businesses of E.ON and RWE will operate under the umbrella of RWE.
Both companies intend to implement the transaction in several steps and completion of the deal is subject to customary antitrust clearances. The agreement could be signed after receiving approval from the respective boards.