Brussels Clears E.ON Takeover of Innogy Assets
The European Commission (EC) has approved German energy giant E.ON’s purchase of its rival Innogy’s network and retail assets, and some of its generation assets.
“Today, we can approve the acquisition of Innogy by E.ON because the commitments offered by E.ON will ensure that the merger will not lead to less choice and higher prices in the countries where these companies operate,” the EU executive’s competition commissioner Margrethe Vestager said in a statement on September 17.
E.ON’s commitments include the disposal of most of its electric heating business in Germany and 34 electric charging stations along German motorways. The company also has to divest part of its retail power business in Hungary, and Innogy’s entire retail electricity and gas operations in the Czech Republic. In all, some 2mn supply customers will need to be divested, but no network businesses.
E.ON CEO Johannes Teyssen said: “The new E.ON’s future begins today. The integration of innogy will create a company fully dedicated to putting customers at the center of everything it does. We want to partner with our customers to actively shape the new energy world while becoming more innovative, using energy with ever-greater efficiency, and making an effective contribution to climate protection.”
E.ON's supervisory board will be increased to 20 members, giving Innogy employee representatives a voice. RWE, which will soon be the biggest shareholder, will have a representative on the supervisory board as well,” the board chairman Karl-Ludwig Kley said.
The new E.ON will continue to be led by the current management under Teyssen. “During the past few years, Johannes Teyssen has focused E.ON on the new energy world. He’s the right person to oversee the swift and successful integration of innogy and our company’s further profitable development,” Kley said.
E.ON’s purchase of Innogy’s assets is part of a larger $25bn asset swap with the latter’s parent company RWE, agreed in 2018. As part of this broad agreement, RWE is set to acquire E.ON's renewables segment – a transaction that was cleared by the EC in February. The pair aim to complete the swap in its entirety by the end of this year.
E.ON's generation and upstream business Uniper, which it divested a few years ago, continues to struggle against the headwinds of the energy transition, opposition to Nord Stream 1 and 2, and the demands of Finnish Fortum, its biggest shareholder. It has lost a number of key executives in the last year.