Innogy Signs Integration Agreements With E.ON and RWE -- Update

(Adds details on asset-swap terms and binding agreements.)

 
   By Anthony Shevlin 
 

Innogy SE (IGY.XE) has signed two legally binding agreements regarding its planned merger with electric services provider E.ON SE (EOAN.XE) and the integration of Innogy's renewables business into fellow energy company RWE AG (RWE.XE).

Thursday's agreements pave the way for E.ON's asset-swap deal, under which E.ON would acquire RWE's 76.8% stake in Innogy and RWE would receive 16.67% of E.ON's equity in return.

In a joint statement, Innogy said the three companies have agreed on integration processes aimed at treating employees fairly and equally. Essen in Germany will remain the registered office and headquarters of the new E.ON, the companies said.

Innogy had previously expressed reservations about the fairness of the asset-swap terms, especially regarding its employees.

"The agreements with E.ON and RWE lay the groundwork for a fair integration processes on equal terms..." Innogy Chief Executive Uwe Tigges said on Thursday.

"Considering the fact that Innogy is being taken over, we negotiated the best possible deal for our employees. The agreement is also in the interest of our customers, shareholders, and other stakeholders," he said.

In May, Innogy's supervisory and management boards declined to give a recommendation to shareholders regarding E.ON's offer, with Mr. Tigges saying that "due to private agreements between E.ON and RWE, we aren't able to conclusively assess whether the offer price altogether is fair."

Innogy at the time said it hadn't received any legally binding commitment from E.ON or RWE regarding the future of its workforce, warning that the extended period of time before the deal's planned closure in 2019 would be unsettling to employees and customers.

E.ON and Innogy on Thursday also agreed on a selection process for filling top leadership positions to form an optimal team regardless of which company its members come from, the three German companies said.

Under the new agreements, Innogy will support regulatory processes and work with E.ON on measures to maintain its portfolio.

"The purpose is to secure the future joint portfolio's intrinsic value and to avoid uncertainty, in particular for enterprise partners, customers and employees," the companies said.

E.ON has made Innogy shareholders a voluntary public takeover offer against payment in cash and the additional acceptance period runs through July 25.

Write to Anthony Shevlin at [e-mail]

(END) Dow Jones Newswires

July 19, 2018 02:54 ET (06:54 GMT)

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