(Updates with E.ON CEO comments.)
By Max Bernhard
The European Union said Tuesday that it cleared E.ON SE acquisition of Innogy SE under the condition that E.ON complies with a remedy package it has offered to get the German utility deal greenlighted.
E.ON is acquiring the distribution and consumer-solutions business as well as certain of electricity-generation assets from Innogy, which is controlled by RWE AG.
The takeover is part of a complex deal between E.ON and RWE, which would effectively split Innogy's assets between the two companies. RWE would retain control over Innogy's renewable-generation centers, while E.ON would take over the retail and distribution networks.
The EU said in March that it would open an in-depth investigation into E.ON's planned takeover of Innogy, citing concerns that the deal could reduce competition for the retail supply of gas and electricity in Germany, Slovakia, Hungary and the Czech Republic.
To address the concerns, E.ON offered to divest most of its heating-electricity customers in Germany and to discontinue the operation of 34 electric-charging stations on German motorways, the EU's antritrust body said Tuesday. The offered remedies also include the divestment of E.ON's business in the retail supply of electricity to unregulated customers in Hungary and Innogy's entire business in the retail supply of electricity and gas in the Czech Republic.
E.ON Chief Executive Johannes Teyssen said Tuesday that the concessions mean that retail businesses with about two million customers would be divested. This will result in a "very low-triple-digit millions of euros" hit to earnings, he added.
E.ON reiterated its target of between 600 million euros ($662.2 million) to EUR800 million in synergies annually from 2022 onward. The company continues to expect at most 5,000 job cuts as part of the integration of Innogy until the synergy target is reached, Mr. Teyssen said.
Write to Max Bernhard at email@example.com; @mxbernhard