Recently, Germany’s two major energy companies, Ion Group and RWE, are brewing a big deal. They plan to go through a complex reorganization to consolidate their business units to deal with the future of renewable energy-led European energy market.
In this M&A transaction, E.ON will receive a 76.8% majority share of RWE in Innogy. In exchange, RWE will receive a 16.67% stake in the merger of E.ON and Innogy, as well as all of E.ON and Innogy's renewable energy assets. .
Although the transaction has not yet been finalized, it still needs to be approved by the oversight committees of the two companies, but it has caused quite a stir in the German and European energy markets. The transaction value may reach 22 billion euros, including cash transactions. It will include the payment of RWE by E.ON of approximately €5 billion to acquire a minority stake in Innogy, and RWE will be accompanied by Innogy's equity of €1.5 billion in cash. If Innogy's debt and other company values are included, the transaction value will be nearly doubled.
E.ON and RWE's Innogy are both important players in the offshore wind market in Europe. At present, E.ON is developing offshore wind power projects including 400MW Rampion projects scheduled to be put into operation this year and 385MW Arkona expected to be put into operation in the coming months. Project. Innogy owns the recently renamed Sofia Offshore Wind Project (located in the Dogger Bank project area) and the recently awarded 860MW Triton Knoll Offshore Wind Power Project with CfD tariff.
After this transaction, RWE will become the second largest wind power operator in Europe, second only to Iberdrola, while E.ON will receive a certain percentage of power system retail and transmission network business.