EU approves Eon’s bid to take over Innogy

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From pv magazine Germany.

Eon has had to wait a long time to get the nod from Brussels but today EU antitrust authorities approved the German utility’s acquisition of the Innogy subsidiary of rival power company RWE.

“Today begins the future of the new Eon,” said CEO Johannes Teyssen. “With the integration of Innogy we are creating a company that will put our customers at the center of our attention.”

To secure approval of the merger – which will see RWE retain Innogy’s renewables unit and acquire Eon’s clean energy operations – Eon had to offload business units including Innogy’s Czechian electricity and gas consumer operation and parts of its own Hungarian interest. In Germany, Eon said it would sell its heater current business and its highway electric vehicle charging operation to a third party.

Eon wants to focus on grid and customer solutions with the acquisition.

A long wait

The deal was first mooted in March 2018 and in January both companies submitted the transaction to the EU antitrust authorities. While RWE’s request quickly received approval, Eon had to wait on the outcome of an in-depth review process launched in Brussels.

Eon’s competitors have said the divestments made by the company to secure the deal will be insufficient to prevent it dominating the power market, and particularly monopolizing data. “There has never been such a concentration of power in the German energy market,” said Gero Lücking, MD of German power provider Lichtblick SE.

Teyssen confirmed Eon hopes to achieve €600-800 million in savings from next year by combining the Innogy business with its own and up to 5,000 jobs could be lost as a result of the merger. A strategy has been agreed with trade unions and the Eon CEO said the outcome should prove socially acceptable.

Eon plans to complete the takeover next week and had already acquired 90% of Innogy’s shares in recent months. Now, a further 9.4% will have to be purchased. “Probably tomorrow, Innogy will belong to Eon,” added Teyssen today.

The power company’s renewables operation will pass to RWE by the end of the month.