We join the business units of these two companies under one roof at RWE, thereby achieving the necessary critical mass,” said Mr Schmitz, the CEO of RWE. But by and large, companies are being broken up and becoming more specialised. - Created: 2000, headquartered in Essen, Germany, - Market Cap: EUR 19.891bn - EV: EUR 31.078bn, - LTM Revenue: EUR 28,539bn – LTM EBITDA: EUR 3,482bn, - LTM EV/Revenue: 1.08x - LTM EV/EBITDA: 8.84x. There is a trend seen in power companies in aiming to provide services to customers that help them reduce their energy costs and carbon footprints which is unusual as helping customers reduce their energy bills does not sound like an especially appealing business model for an electricity company. Eon is well positioned for this change as it operates the energy network and develops customer solutions for retail clients. Norway’s Statoil last week rebranded itself as Equinor to reflect its transformation into a “broad energy” company that deploys windfarms as well as oil rigs. Seven years after an earthquake off Japan’s eastern coast led to three meltdowns at the Fukushima Daiichi nuclear power station, the aftershocks are still being felt across the world. Rolf Martin Schmitz, the group’s chief executive, said: “Critical mass is the key in renewable energy. That puts it in direct competition with E.ON, which promised to roll out charging points faster as a result of the asset swap. “Before this transaction, neither Innogy nor Eon were in such a position. ... RWE … Also, Eon might benefit from higher valuations as it will operate largely regulated assets such as networks which investors like due to the predictable returns that regulated businesses generate. The next transaction to follow the completion of the major asset swap pertains electricity from wind farms, which were also part of the preceding trade. Furthermore, RWE will gain a share of 16.67% in the combined entity and the minority stakes held by Eon’s subsidiary PreussenElektra in the RWE-operated nuclear power plants Emsland and Gundremmingen. Some, such as Italy’s Enel and Spain’s Iberdrola (ScottishPower’s owner) are still pursuing this “do everything” model. By using our site you accept the terms of our cookie policy. Eon was created in 2000 through the merger of VEBA and VIAG. The transaction will improve the efficiency of Eon’s operations by means of the combination of energy networks and customer solutions business segments and the administrative and management functions of Eon and Innogy. “This is to some extent a question of try it and see what works. CTRL + SPACE for auto-complete. E.ON, meanwhile, is majoring on supplying people with energy and services, and will grow from 31 million customers to roughly 50 million after the deal. It marks a decisive break with the old, traditional model of a vertically integrated energy company that generates energy, transports it and sells it. Add on Innogy’s €15bn and assume that Eon borrows the net €3.5bn needed to buy out the minority shareholders in Innogy. Renews provides news-focused business intelligence on the renewable energy sector with market-leading coverage of offshore and onshore wind. This role will become considerably more important in the future as intelligent grids and new solutions will grow closer together, due to increasing decentralisation and the growing digitalisation of the future energy world. Enlit Europe will gather in Milan between 30 November and 02 December 2021 and will feature innovative companies accelerating decarbonisation at Europe’s largest gathering of companies driving and leading the energy transition. Currently RWE’s renewables generation capacity, including hydropower and biomass, stands at approximately 10GW. As a result, the two largest utilities of Germany, Eon and RWE, saw themselves faced with two challenges. How do companies adapt to a world where the rapid growth of renewables pushes down wholesale prices, and the electrification of cars begins to be felt on power grids? 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[For E.ON], owning grids and lobbying government for good regulatory outcomes is a well-understood business. On July 30th 2018, Eon owned 86.2% of the Innogy shares and in March 2019, the European commission opened an in-depth investigation into Eon’s proposed acquisition as it may reduce competition in retail markets for electricity and gas in several European member countries. The two utilities have entered a power purchase agreement involving Eon buying around 3 TWh from RWE's UK wind farm. To compete in this industry as a conventional power generator, scale has therefore become even more important. © 2020 Institute for Energy Economics & Financial Analysis. By tapping into the future growth market of renewables, RWE sets a new stage and creates sustainable prospects and over time RWE should be able to replace its cash flows from conventional generation with renewables. In the course of the takeover about 2,700 employees are transferring from innogy to RWE. Eon plans to squeeze out the remaining shareholders over the next weeks to become the sole owner of Innogy before it will start with the integration of Innogy’s assets into its own business. Philip Gordon is based in Clarion Energy's Cape Town office as a Content Producer for the Smart Energy International and Power Engineering International media titles. Coming so soon after 2016’s drastic overhaul, last week’s shakeup raises the question of what a successful energy utility looks like in Europe today. €1bn of this sum is envisaged for projects in Germany. The complex asset-swap deal first unveiled in March last year — under which German energy company RWE is to acquire renewables-focused utility Innogy and the renewable-energy assets of utility E.ON, with E.ON taking on RWE’s energy networks and retail business — is to be concluded in September, according to financial results published by E.ON. The closing of the deal means Innogy’s stake in the Austrian power utility Kelag has also transferred, bringing its hydroelectric business to RWE’s portfolio. John Feddersen, chief executive of Aurora Energy Research, said the two firms were going in very different directions, but the path E.ON had taken was less well trodden. FRANKFURT -- German energy giant E.On SE on Sunday said it had in principle agreed to swap a range of assets with rival RWE AG, the latest in a yearslong series of … The merger drew the ire, and legal action, from several smaller energy suppliers in the companies native Germany, following approval of the transaction by the European Commission. Please confirm that you have read and agree to our terms and conditions. The transaction will shift Eon’s focus away from energy generation and concentrates it towards the operation of its grids and towards customer solutions. by David Weston. Final step of one of the largest transactions in German industrial history: today, the major asset swap between RWE and E.ON is finally completed, as RWE takes over the innogy activities. 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