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Innogy boss slams E.ON deal as 'bad news for employees'

Utility’s head Uwe Tigges says 2018 'a very turbulent year for Innogy' as mega-deal looms

Innogy chief executive Uwe Tigges slammed the planned split-up of his company between its current parent RWE and rival utility E.ON as bad news for Innogy workers that came as a surprise in a difficult last year.

“2018 was a very turbulent year for Innogy. The transaction announced by E.ON and RWE early in the year caught us by surprise, and for our employees it was anything but good news,” Tigges said following the publication of 2018 company results.

Tigges has previously said he fears the impact on jobs of the €4.9bn ($5.5bn) deal, which is slated to create one of Europe's biggest renewable energy players, and has tried to mitigate the implications for workers in negotiations over the merger.

“We succeeded in concluding agreements with both E.ON and RWE on the integration of our business activities into both groups that took account of the interests of our employees, investors, customers and other stakeholders.”

The CEO added Innogy’s key focus is to further develop its operational business and bolster its position in an increasingly competitive market environment.

“I am very confident in this regard, since our employees are doing an outstanding job despite the uncertainty and the added burden caused by the planned transaction of E.ON and RWE.”

RWE and E.ON in March 2018 had announced plans for a wide-ranging share and asset swap deal that would bring E.ON and Innogy’s renewable (and nuclear) generation assets under the roof of a beefed-up RWE, while transferring Innogy’s grids and customers business to E.ON.

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E.ON CEO Johannes Teyssen, also speaking today, said the transaction is on track, and he expects the necessary EU competition approvals during the second half of this year - despite an in-depth probe by the European Commission into parts of the deal.

If finally approved, the new RWE thanks to Innogy’s and E.ON’s renewable assets would immediately become the world’s second-biggest offshore wind operator, and one of Europe’s top green power producers.

Innogy chief financial officer Bernhard Günther said last year was not a good year for wind power, but the company laid the foundations for further growth.

“We performed well in the area of auctions in particular, and we also successfully entered into the solar market in Australia,” Günther said.

“Through the sale of shares in the Triton Knoll offshore wind farm to two Japanese companies we found partners who we can work with to bring this attractive major project to completion.”

Unusually low wind levels across large areas of Europe pushed Innogy’s adjusted earnings before interest and taxes (Ebit) in the renewables division (that is slated to be part of the new RWE) down to €299m ($338m) in 2018, from €355m in thre previous year.

Together with declines in retail earnings, that contributed to a fall in overall adjusted net income to €1.03bn, down from €1.22bn in 2017.

The utility, however, expects a noticeable increase in renewable earnings to €400-500m this year, amid a continued expansion of generation capacities. This outlook is based on an assumption of “normalised” weather conditions.

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E.ON CEO says Innogy deal on track despite 'expected' EU probe

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