German energy company Innogy announced the conclusion of two legally binding agreements on Wednesday – one with E.ON, another with RWE – on the planned integration of Innogy into E.ON and the planned integration of Innogy’s renewables business into RWE.
Back in March, E.ON had announced a deal to acquire 76.8 percent of RWE's subsidiary Innogy in exchange for granting RWE a 16.67 percent stake in E.ON.
E.ON would also transfer to RWE most of its renewables business as part of the agreement, a move which is set to reshape Germany's energy market.
"The agreements [on Thursday] call for the planned transaction to be implemented in a transparent process in which all employees will be treated fairly and as equally as possible, regardless of which company they currently work for," a joint press release read.
"In addition, the integrations shall take into account the strengths of the respective companies. Essen will remain the registered office and headquarters of the new E.ON as well," it added.
According to the agreement, Innogy will "play a positive role" in supporting the swift implementation of the planned transaction between RWE and E.ON, and also with respect to the capital market.
"The companies involved agree that working together early to plan integration measures is in the interest of their customers, employees, and shareholders. Consequently, the planning of the integrations of Innogy’s businesses into E.ON and RWE will be conducted by means of joint collaborative processes," the statement said.
Innogy CEO Uwe Tigges said they negotiated "the best possible deal" for their employees "considering the fact that Innogy is being taken over".
Johannes Teyssen, E.ON’s CEO, also said they were pleased to be able to agree with Innogy’s management on “the best possible way to prepare for the integration of Innogy".
"Our agreement with Innogy ensures Innogy's support in obtaining timely regulatory approvals and a swift integration after the transaction closes," he said, adding it was "a very important step towards creating a leading European energy company whose portfolio combining intelligent energy networks and highly innovative customer solutions will enable it to shape the energy future".
RWE CEO Rolf Martin Schmitz said with the transaction, RWE "becomes a broadly diversified power producer whose conventional generation business will be optimally complemented by a large renewables portfolio, linking the two with its existing trading platform".
The new E.ON's future leadership team will be announced in 2019 at the earliest.
By Hale Turkes