The £3 billion merger of two of Britain’s biggest energy suppliers is in doubt after the announcement of a multibillion-euro asset swap by the German owner of one of the companies. Eon, the German energy group, said yesterday that it had agreed to buy Innogy from RWE, its domestic rival, as part of an 20 billion euro deal that marks one of the biggest shake-ups of the European power supply market. Innogy owns Npower, which is in the process of merging its energy supply business with that of SSE to create Britain’s largest energy supplier, with more than 11 million customers. However, RWE’s sale of a 76.8 per cent stake in the renewables-focused business to Eon, which already owns a big British energy business, formerly Powergen, could disrupt the deal. Yesterday all sides declined to comment on the impact that a change of ownership at Innogy would have on the SSE-Npower marriage, a merger that would reduce the UK’s Big Six energy suppliers to a Big Five. For SSE, which is listed on the London Stock Exchange, the merger is a key part of its strategy to become a business focused on “assets and infrastructure” rather than retail customers. Under the terms of the deal, SSE will own 65.6 per cent of newly merged company, with Innogy to get a 34.4 per cent stake. The merged business would have 11.5 million gas and electricity accounts serving an estimated seven million UK households. The combined assets of the company are thought to be worth £3 billion and would consist of SSE’s and Npower’s household supply businesses and Npower’s business supply operations.
Times 12th March 2018 read more »
The complex asset swap between Eon and longstanding rival RWE, devised by a small team of executives and investment bankers over the past six months, is certainly expected to send shockwaves across Europe’s energy industry. RWE was only approached shortly before Christmas, according to a person with knowledge of the discussions. But in less than three months of frantic negotiations, both sides agreed on a series of transactions that will upend Germany’s two largest utilities and mark the end of years of uncertainty across the sector. The transaction will involve two stages. First, Eon will buy RWE’s 76.8 per cent stake in Innogy, the renewables energy business that was spun out in 2016, and table an all-cash offer worth a 40m euros share, a 15.6 per cent mark-up on Friday’s closing price to Innogy’s minority shareholders. Next, Eon will hand back Innogy’s renewable energy assets as well as its own to RWE. The deal will leave Eon as Europe’s largest operator of electricity grids and retail, while RWE will be the continent’s second-largest producer of green energy.
FT 11th March 2018 read more »
With investors from Italy and France weighing their own offers for the operator of green power plants and grid networks, EON on Sunday announced a complex deal with Innogy’s main shareholder, RWE AG. The transaction would solidify EON and RWE as the main German electricity and gas providers and keep Innogy out of the hands of foreign utilities that have gained scale over their German counterparts in recent years. Seven years ago, a nuclear meltdown in Japan prompted Merkel to push for greener alternatives, upending the energy business. Once among the most profitable utilities in Europe, EON and RWE wrote off billions from their balance sheets, saw their market value slump and ended splitting up themselves. For a leading lawmaker in the chancellor’s coalition, EON’s move bolsters the weakened German companies against larger rivals such as Enel SpA of Italy and Electricite de France SA.
Energy Voice 12th March 2018 read more »
Germany’s top utilities on Sunday announced plans to break up Innogy (IGY.DE), whose assets will be divided among parent RWE RWED.DE and rival E.ON EONGN.DE in the sector’s biggest overhaul since a landmark move to exit nuclear power. The deal, which includes E.ON making a 5.2 billion euro (£4.62 billion) takeover offer to Innogy’s minority shareholders, spells the end of the network, renewables and retail energy group, carved out from RWE two years ago, as a standalone unit. Through the deal, which includes a share issue and asset swaps, E.ON will acquire Innogy’s prized regulated energy networks and customer operations, while RWE will take on the renewables businesses of both E.ON and Innogy.
Reuters 11th March 2018 read more »
EON SE’s 22 billion-euro ($27.1 billion) bid for Innogy SE establishes a German energy champion after Angela Merkel’s radical energy policy wrought years of upheaval on the country’s once-mighty utilities. With investors from Italy and France weighing their own offers for the operator of green power plants and grid networks, EON on Sunday announced a complex deal with Innogy’s main shareholder, RWE AG. The transaction, first reported by Bloomberg March 10, would solidify EON and RWE as the main German electricity and gas providers and keep Innogy out of the hands of foreign utilities that have gained scale over their German counterparts in recent years. Shares of all three companies rose.
Bloomberg 11th March 2018 read more »
A record number of households switched suppliers in the retail energy market last month, showing it has never been more competitive, as the Government accelerates its plans to cap prices. The legislation to support a price intervention across the market came under a second parliamentary reading last week ahead of fresh figures which show a record amount of energy switching. Energy UK revealed that over 660,000 customers switched electricity supplier last month. The trade group said this represented “a huge” 60pc increase from February last year. The highest ever number of switches in a single month means that in this year alone over a million customers have opted for a new deal.
Telegraph 12th March 2018 read more »