German power utility RWE has achieved a major milestone in the current asset swap transaction with its counterpart E.ON and has filed the acquisition of E.ON's renewable energy business with the European Commission. This filing is the first step of a merger control procedure which is required to complete the asset swap. This filing occurs following a pre-investigation undertaken by the European Commission during the last few months to get an accurate picture of the transaction potential consequences according to the EU competition rules.
The agreement between the two utilities was announced in March 2018. RWE will receive a 16.67% stake in E.ON, take over E.ON's entire renewable energy businesses and E.ON's minority interests in the Emsland and Gundremmingen nuclear power plants operated by RWE as well as innogy’s gas storage business and its stake in the Austrian power utility Kelag. In exchange, E.ON will acquire 76.8% of RWE's subdidiary Innogy, which was set up in 2016 by splitting the renewable power generation, gas and power network and retail businesses into a separate entity.
After the deal, E.ON will focus on networks and retail activities, while RWE will be focusing on renewable and conventional power generation. The two companies intend to complete the transaction objectives in the second half of 2019.