EU clears RWE to become European green giant

Part takeovers of E.ON and Innogy to create one of Europe’s largest clean energy producer once UK and US watchdogs also approve

The European Commission (EC) has given the green light to RWE’s take-over of the renewables operations of E.ON and Innogy, bringing RWE closer to become one of Europe’s largest renewable energy producer and the world’s second biggest operator of offshore wind.

The EC approval comes in time with the German Federal Cartel Office’s (GFCO) go-ahead for RWE’s acquisition of a 16.7% stake in E.ON. RWE is still seeking anti-trust approvals in the UK and the US for the transaction to proceed.

RWE, which filed notice of the acquisition with the EC for review in January, said in a statement that the approvals had been “preceded by extensive preliminary reviews [by the EC and GFCO] in order to obtain a precise picture of the effects of the transaction with E.ON on competition”.

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Markus Krebber, CFO of RWE, said: “This is very good news. Thanks to this decision, we have passed another milestone en route to turning RWE into a leading global player in the field of renewable energy.”

RWE has lagged behind its southern European peers Iberdrola and Enel in its renewable energy expansion, which have bet on green energy much earlier, becoming world leaders in the area.

When the deal was first announced in early 2018, RWE chief executive Rolf Martin Schmitz pointed out that one of its rationales was to gain "critical mass" to be successful in the renewables field, also to be able to compete head-on in tenders.

"Before this transaction, neither Innogy nor E.ON were in such a position,” Schmitz then stressed.

Once the transaction with E.ON is complete, currently on schedule for the second half of 2019, RWE said it will operate a plant portfolio that is 60% low- or zero-carbon.

RWE said its “objective is to continue expanding the business with renewables on a global scale”, driven by a capital spend of some €1.5bn every year.

Along with the renewable energy businesses of E.ON and Innogy, RWE will also take over E.ON's minority interests in the 1.4GW Emsland and 1.3GW Gundremmingen nuclear power stations (to be shuttered in 2022 and 2021 respectively), which RWE is already operating, as well as Innogy’s gas storage business and its stake in the Austrian power utility Kelag.

RWE filed this part of the transaction with the UK Competition & Markets Authority yesterday. Furthermore, the acquisition of the US assets will be submitted to the US anti-trust authorities in the near future

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