Innogy, E.ON and RWE Table Integration Procedures

Innogy has concluded two legally binding agreements – one with E.ON, another with RWE – on the planned integration of innogy into E.ON and the planned integration of innogy’s renewables business into RWE.

As reported earlier, E.ON and RWE reached an agreement under which E.ON would acquire RWE’s 76.8% stake in innogy in return for granting RWE an effective participation of 16.67% in E.ON SE.

Under the agreement, E.ON would transfer to RWE most of E.ON’s renewables business. Also, RWE would receive the entire innogy renewables business. The renewables businesses of E.ON and RWE would be brought together under the umbrella of RWE.

The Executive Board and the Supervisory Board of innogy SE have subsequently expressed their concerns that innogy’s employees ‘‘might suffer structural disadvantages compared with E.ON Group employees” as part of the integration process.

The two new agreements call for the planned transaction to be implemented in a transparent process in which all employees will be treated fairly and as equally as possible, regardless of which company they currently work for, the companies said in a joint statement.

In May, innogy, E.ON, and RWE, in consultation with their Group Works Councils, reached an Agreement in Principle on Collective Bargaining for Germany with the unions ver.di and IGBCE. Under this agreement, compulsory redundancies for operational reasons are virtually ruled out in this transaction, the companies said. On this basis, all parties are preparing for further discussions to socially flank the integrations at E.ON and RWE.

In addition, E.ON and innogy have agreed on a fair and transparent selection process for filling top leadership positions in order to ensure an optimal leadership team regardless of which company its members are from. This process will also apply to the filling of leadership positions in the renewables business at RWE. The new E.ON’s future leadership team will be announced in 2019 at the earliest.

RWE will establish an integration committee for the renewables business that will include representatives of innogy and E.ON. The agreement calls for an orderly process that will involve co-determination bodies and be led by RWE. Its purpose will be to work together to design solutions for the planned integration that are viable for all the companies involved and that promote the successful advancement of the business units affected by the transaction.

The integration of innogy into E.ON and the transfer of innogy and E.ON’s renewables businesses can take place only when E.ON’s acquisition of innogy closes.

If, prior to the closing of the transaction, issues arise regarding the disposal of key assets of innogy, it is in the interest of the companies involved to explore alternatives that maintain the portfolio’s intrinsic value.

Furthermore, RWE stated that the Agreement in Principle contains provisions under which suitable funding measures could be made available to innogy prior to the closing of the transaction. The purpose of such measures would be to maintain or expand the renewables business that will be transferred to RWE.

“With this transaction RWE becomes a broadly diversified power producer whose conventional generation business will be optimally complemented by a large renewables portfolio, linking the two with its existing trading platform,” Rolf Martin Schmitz, CEO of RWE, said.

”Dedicated and motivated employees are the key to RWE’s current and future success. Today’s agreement establishes a superb foundation for integrating innogy’s and E.ON’s renewables businesses swiftly, transparently, and collaboratively. We will treat all employees equally and fairly, regardless of whether they currently belong to RWE, innogy, or E.ON. Together, we will determine whether the transfer of the renewables business to RWE can be accelerated.“