Energy company Innogy has signed two pacts to pave the way for its integration into fellow German electricity giant E.ON.
Innogy is a subsidiary of RWE and was created in April 2016 by splitting the renewable, network and retail businesses of RWE into a new entity.
However it is now going to be broken up after RWE agreed a deal with its rival E.ON, and the renewables arm of Innogy is to return to RWE. E.ON made innogy shareholders a voluntary public takeover offer against payment in cash. In an asset-swop deal, E.ON would acquire RWE’s 76.8 per cent stake in Innogy and RWE would receive 16.67 per cent of E.ON’s equity in return.
The two legally binding agreements cover the planned merging of Innogy into E.ON and the integration of Innogy’s renewables business into RWE. They are intended to benefit innogy’s customers, staff and shareholders.
Innogy’s chief executive Uwe Tigges said the agreements “lay the groundwork for a fair integration processes on equal terms and thus for constructive collaboration in the future”.
“Considering the fact that Innogy is being taken over, we negotiated the best possible deal for our employees. The agreement is also in the interest of our customers, shareholders, and other stakeholders.”
The agreements call for the integration process to be implemented “in a transparent process in which all employees will be treated fairly and as equally as possible, regardless of which company they currently work for”.
E.ON chief Johannes Teyssen the agreement “ensures Innogy’s support in obtaining timely regulatory approvals and a swift integration after the transaction closes. It’s a very important step towards creating a leading European energy company whose portfolio combining intelligent energy networks and highly innovative customer solutions will enable it to shape the energy future. On the basis of this agreement, we want to create a highly motivated and dedicated team for the new E.ON.”
With the Innogy renewables division returning to RWE, Rolf Martin Schmitz, chief executive of RWE, said: “With this transaction RWE becomes a broadly diversified power producer whose conventional generation business will be optimally complemented by a large renewables portfolio, linking the two with its existing trading platform.”
He said the agreement “establishes a superb foundation for integrating innogy’s and E.ON’s renewables businesses swiftly, transparently, and collaboratively. We will treat all employees equally and fairly, regardless of whether they currently belong to RWE, innogy, or E.ON. Together, we will determine whether the transfer of the renewables business to RWE can be accelerated.”