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E.On makes EUR 22bn bid for RWE’s Innogy
Posted on Monday, 12 March 2018 11:34
The German energy market is set for a reshuffle as E.On agrees to a complex takeover of renewable energy business Innogy from RWE in a deal valuing the target at roughly EUR 22.00 billion.

Such a move would result in a transformation of some of Europe’s most critical energy companies and would be the largest announced in the country since Ireland-based Linde agreed to buy its Munich-located industrial and medical gas counterpart for EUR 33.69 billion in June last year.

Under the terms of the multipart deal, E.On will become a business solely-focused on providing energy networks and services though the purchase of Innogy, with RWE acquiring the renewable operations from the two groups and taking a 16.7 per cent stake in the utility buyer.

Germany is set to exit nuclear power by 2022; this transaction is in line with such plans.

E.On announced that it will acquire RWE’s 76.8 per cent stake as well as making a voluntary public takeover offer in cash at a value of roughly EUR 40.00 per share, representing EUR 36.76 in cash plus assumed dividends for the years 2017 and 2018 in the amount of EUR 3.24 per item of stock.

The proposal is a significant premium to Innogy’s close of EUR 34.17 on 9th March, the last trading day prior to the statement, when the group had a market capitalisation of about EUR 21.64 billion.

In addition, E.On will transfer its renewable business and minority interests in PreussenElektra, as well as the target’s operations in the market, its gas storage asset and its Austrian energy supplier Kelag to RWE.

The transaction further provides a cash payment from RWE to E.On of EUR 1.50 billion.

An announcement followed an earlier report by Bloomberg yesterday, which cited people familiar with the matter as saying the companies were in advanced talks.

Innogy claims to be Germany’s leading energy firm with EUR 44.00 billion in annual revenue, 40,000 employees and operations in 16 countries including the UK, the Netherlands and Belgium.

E.On is an international energy supplier which recorded sales of EUR 38.17 billion in 2016.

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