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CMA launches RWE/E.On asset swap probe

Image: RWE.

Image: RWE.

The Competition and Markets Authority (CMA) has launched an inquiry into the so-called ‘mega merger’ between RWE and E.On.

Yesterday the CMA gave notice that it had launched a merger inquiry into the deal, with comments to be invited between now and 13 March 2019.

The deadline for the watchdog’s phase one decision has been set for 24 April 2019.

The CMA’s inquiry is to assess whether the transaction is likely to result in a relevant merger situation and should that situation arise, whether or not it would likely impact on competition within the UK market.

The deal between RWE and E.On was first announced last year and, if agreed, will see RWE become Europe’s largest utility-scale renewables company as part of a major and complex asset swap.

Under the terms of the deal, RWE’s remaining stake in innogy would be sold to E.On with RWE keeping hold of all of innogy’s renewables interest. RWE would, in turn, receive a 16.67% stake in E.On as part of a self-styled “wide-ranging exchange of business activities and participations”.

Last month RWE confirmed it expects the deal to complete towards the end of the year despite complications arising from the now cancelled spin-off of innogy’s UK-facing supply arm npower and rumoured interest in all or part of innogy from investment giant Macquarie.

It’s the second time the CMA has elected to investigate potential mergers affecting the UK energy market, having approved the SSE/npower merger in October last year, two months before the deal was cancelled.

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