E.ON to acquire RWE's stake in Innogy in EUR22bn deal

RWE plans to sell its stake in Innogy Npower’s parent company to rival German utility giant Eon

In addition, RWE will - after E.ON has gained control over innogy - get substantially all of E.ONs renewables business including the economic benefits as of January 1, 2018.

German energy company RWE AG (ETR:RWE) on Sunday said it would sell its majority stake in Innogy SE (ETR:IGY) to sector player E.on SE (ETR:EOAN), but it will get the renewables businesses of both firms to create "a leading European utility for renewables and security of supply".

The in-principle agreement involving asset swaps is part of a major restructuring of Germany's energy market as Europe's top economy switches from conventional to renewable power. Various other business activities would also be exchanged, while RWE would also make a €1.5 billion cash payment to E.On under the terms of the agreement.

The logo of German energy company Innogy at its headquarters in Essen.

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As per the deal, RWE's 76.8% stake in innogy is valued with EUR40.00 per share including the expected dividends of EUR3.24 per share in total for 2017 and 2018, which RWE would still receive until the expected closing of the transaction.

Eon would then focus on energy networks and retail, with RWE more generation focused.

Under the terms of the transaction, E.ON will transfer most of its renewable business to RWE. Business daily Handelsblatt said that "for decades EON and RWE were bitter rivals".

Germany's energy landscape has been rapidly transformed since Chancellor Angela Merkel announced the complete phaseout of nuclear energy after Japan's 2011 Fukushima disaster.

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