German E.ON, RWE agree Innogy deal with major restructuring

Reuters  Thilo Schmuelgen

The deal requires the approval of the board of directors at Eon and RWE. It will also result in E.ON becoming exclusively focused on customer solutions and energy networks, with RWE acquiring E.ON's renewable energy assets.

European shares rose in early trading on Monday to their highest in nearly two weeks, boosted by gains among German utilities after the sector's leading players announced a major overhaul of the industry.

Germany's cartel office said it was too early to comment on possible hurdles in the planned asset swap deal. Innogy and E.ON have also rallied.

A source involved in the deal said it would be slightly more beneficial to E.ON, which would become a bigger regulated business by adding more networks, while RWE would end up owning interests in the riskier and more competitive renewables sector.

RWE would, in turn, gain an effective participation of 16.67 percent in E.ON.

Arizona draws 4 seed in South region in NCAA tournament
The Wildcats were placed with Virginia in the South Region bracket along with second-seeded Cincinnati and third-seeded Tennessee. If Arizona wins its first round game it would face either No. 5 Kentucky or No. 12 Davidson on Saturday in Boise.

The big six pair both shrugged off fears that a complex deal between German energy giants RWE and Eon, which emerged over the weekend, would derail their plans to create Britain's second largest energy supplier.

"A win-win?" Morgan Stanley suggested in a note, reiterating its "in-line" view of the industry.

Germany's biggest power producer RWE spun-off innogy in 2016, but still holds a majority stake in the company focusing on renewables, retail, power distribution and other new energy areas like electric mobility. It has been in turmoil since former Chief Executive Peter Terium resigned in December and on Monday said it would cut 400 million euros in costs through the end of 2020.

Innogy, which reported a 3 percent rise in adjusted operating profit, also said it would propose an unchanged dividend of 1.60 euros per share for 2017, compared with the 1.61 euro average forecast in a Reuters poll.

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