E.on completes separation of fossil fuel and renewable business

4 January 2016 (Last Updated January 4th, 2016 18:30)

German energy utility E.on has completed separation of its fossil fuel business from its renewable energy assets.

German energy utility E.on has completed separation of its fossil fuel business from its renewable energy assets.

The firm has created a new entity known as Uniper, which will have the conventional power generation assets under it including hydropower, natural gas and coal. It will also hold global energy trading operations carried out by E.on.

Uniper spinoff is pending shareholder approval, following which it is expected to take place in the second half of this year.

The main company will function as E.on and be focused on renewables, energy networks and customer solutions.

"Separating these businesses … will make both companies more agile and sharpen their profile for customers and investors."

The plan for the strategic separation was announced in November 2014.

E.on CEO Johannes Teyssen said: "This liberates us from continually having to make compromises.

"Our ambition is for both companies, which soon will be legally independent of one another, to become leading players in their respective energy worlds.

"Separating these businesses, which were formerly managed together, will make both companies more agile and sharpen their profile for customers and investors."

Once the spinoff is completed, the firm will divest a majority stake in Uniper and list its shares on the stock market. The remaining stake for the company is expected to be sold over the medium term.

Uniper presently has a balanced generation portfolio comprising around 40GW of dispatchable capacity, and will have Klaus Schäfer as its chief executive.

The strategic reorganisation and the ensuing split has been planned by E.on to counter a sector crisis, which had affected its profits and pushed down the shares prices of the company.