Although the two energy companies are not discussing details of the transaction directly, all options and scenarios are being considered with the support of advisers and bankers, the article explains. Furthermore, Reuters revealed that an unidentified source from the French government has confirmed that talks are being held, and that, however, the banks have not been given mandate to proceed with the operation.
A contract between RWE and Engie could be a foundation stone for a Franco-German alliance in the energy sector, which is also being discussed at government level. However, it is difficult that a final decision will be taken before the conclusion of German upcoming elections, which will be held in September.
According to Reuters, one of the possible scenario envisages the possibility that RWE swaps part or all of its 76.79% stare in Innogy for a direct minority stake in Engie. The press agency estimates that Engie currently has a market value of approximately €33 billion ($36.9 billion), while that of Innogy is estimated at €18.6 billion.
First rumors on a possible acquisition of Innogy by Engie were reported by Bloomberg in mid-March. German financial newspaper Handelsblatt also reported at the time that RWE’s 2015 board resolution obliges the group to maintain a 51% stake in the unit. This means it could sell only the remainder of the 77% stake it currently holds.