E.ON agrees to acquire Innogy from RWE in €43bn deal

E.ON agrees to acquire Innogy from RWE in €43bn deal

E.ON agrees to acquire Innogy from RWE in €43bn deal

The deal would give E.ON greater economies of scale in power distribution and retail and RWE in renewables, making it easier for them to cope with Germany's rapid shift to cleaner energy sources.

Germany's energy market has been rapidly transformed since Chancellor Angela Merkel announced a phase-out of nuclear power after Japan's 2011 Fukushima Dai-ichi nuclear power plant meltdown.

Peter Altmaier, the next economy minister and a close ally of Merkel, said the deal was a outcome of that shift, known as the "Energiewende" in German. RWE and E.ON, whose share prices collapsed over the past decade, rose 11 and 4.6 percent respectively.

Assuming the deal goes through, and unites the large-scale renewables assets of Innogy and E.ON Climate & Renewables under the RWE umbrella, the operating asset base of the two will amount to about 6.35GW of onshore wind and 2.1GW offshore, plus a small but growing PV operation.

French shares were modestly higher on Monday as strong U.S.jobs report stoked optimism about global growth and German utilities E.ON and RWE announced a major overhaul of the industry.

"Through the renewable pipeline, RWE, too, should be able to offset its dwindling nuclear and lignite business as well as attract partners for the expansion of its wind business". It will also receive a 16.67% stake in Eon, and pay the company €1.5bn.

The all-German transaction comes less than two years after E.ON and RWE both split up their businesses to separate legacy fossil fuel power plants from more promising networks and renewable assets.

In a letter to staff seen by Reuters, Chief Executive Uwe Tigges said that Innogy's management and supervisory boards would thoroughly assess the planned deal, which was agreed in principle and still requires antitrust approval.

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