Three months ago, investors wanting exposure to Germany’s utilities had a choice of two leading companies. Now, after one of the biggest restructurings the German power industry has seen, they have four. Both RWE and Eon have divided themselves in two, creating respectively the entities Innogy and Uniper, which listed within less than a month of each other on the Frankfurt stock exchange. Suddenly, an industry that seemed to be in perpetual crisis has something to brag about. Shares in Innogy and Uniper have risen since their flotations. For Stephan Lehrke, senior partner at Boston Consulting Group, the utilities “are now looking to the future” and can start thinking about growth options, as well as even mergers and acquisitions. “The risks are still there but they’re manageable now,” he says. The restructuring has radically redrawn the German energy landscape by splitting it into two parts — ostensibly a “clean” one and a “dirty” one. RWE and Uniper have the old gas and coal-fired power stations that symbolise Germany’s fossil fuel past, while Eon and Innogy hold the clean, green businesses such as infrastructure and renewables. The original companies, Eon and RWE, are still operating the nuclear assets and are liable for any bills and future clean-up costs.
FT 16th Nov 2016 read more »