This morning, Bloomberg reports on German utility E.ON having agreed to acquire Innogy, the renewable energy arm of other German utility giant RWE.
This is a groundbreaking piece of news, as it will transform the energy industry in Europe’s largest economy.
With a push to renewable energy, these two companies have taken a different approach. While E.ON announced in a complete rebranding approach, that it will focus completely on renewables going forward (see here), RWE – dependent to a large degree on fossile fuels, actually put up all its renewable energy business into a separate company called Innogy. With the news now a large change is happening.
As these companies are huge, not only in the German context, it is a rather complex deal, as Bloomberg report. The deal values Innogy at around EUR22 billion ($27.1 billion).
With the Energy Transition (Energiewende) started by the German government, this deal shows that it has reached the last corners of Germany and completely reshaped not only energy production towards renewables, but also a complete change in the way energy will be produced, marketed and sold going forwards. The two utility giants were greatly affected and had to write off several billions of EUR.
With the deal, E.ON acquires all shares of RWE in Innogy, and makes RWE a shareholder in EON.
While both companies have not really stepped into geothermal, EON has been looking into geothermal energy in the UK, Denmark and also recently in Sweden. How realistic this will change and push things for geothermal will have to be seen.