Landmark deal between German utilities clears major hurdles in EU and at home
Reuters / Handelsblatt
The European Commission announced Tuesday that it will not raise antitrust objections to a major part of the deal between German utilities RWE and E.ON, Reuters reports. The approval clears the way for RWE to acquire the renewable energy businesses of both E.ON and Innogy, a former RWE subsidiary. The decision settles one piece of a complex asset swap between the utilities that would reshape German energy markets. The deal, agreed in 2018, would leave E.ON as a major power supplier, focused on energy grids and retail customers, while RWE focused on power production, including from renewables. In a press release (in English), the European Commission said regulators concluded that RWE’s purchase “would raise no competition concerns in the European Economic Area.”
Handelsblatt reported that Germany’s federal competition authority also approved another piece of the deal, namely RWE’s plan to acquire a 16.7 percent stake in E.ON. However, one major hurdle remains, Handelsblatt reports: the EU must still approve E.ON’s plan to acquire the network and sales divisions of RWE’s spin-off, Innogy.
Critics have argued the deal will give E.ON in particular too much market power. Competitors, including green electricity supplier Lichtblick and many municipal utilities, plan to oppose the merger.
