“The takeover represents an enormous boost for RWE’s green expansion in the USA.”
(Photo: dpa)
Berlin RWE is strengthening its renewable energy business in the USA with an acquisition worth almost seven billion euros. The energy group is buying the solar system developer and operator Con Edison Clean Energy Businesses from the regional supplier Con Edison from New York, as it announced on Saturday evening in Essen.
According to the company, the acquisition, which is worth $6.8 billion (€6.9 billion) – including debt – almost doubles its portfolio of wind, solar and battery storage systems in the USA and now has an installed capacity of 7 .2 gigawatts (GW).
For RWE, it is the largest takeover since the spin-off of Innogy in 2018. The Essen-based group is receiving financing support from Qatar’s sovereign wealth fund, QIA.
This draws a 2.43 billion euro mandatory convertible bond. This means that QIA can take a good nine percent stake in RWE and become its largest shareholder. The Gulf state is already involved in Germany with Deutsche Bank, Volkswagen and Porsche.
Top jobs of the day
Find the best jobs now and
be notified by email.
“The takeover of Con Edison Clean Energy Businesses means an enormous boost for RWE’s green expansion in the USA, one of the most attractive and fastest growing markets for renewable energies,” said CEO Markus Krebber. This will make RWE number two in the USA among operators of solar systems and number four overall for renewable energies. However, the distance to number one, NextEra, which has an installed capacity of 58 gigawatts, is large.
Criticism from RWE shareholder Enkraft
Around 90 percent of the three GW installed capacity at Con Edison Clean Energy consists of solar systems. With this, RWE is increasing the solar share in its portfolio to 40 from the previous three percent. According to RWE, there is also a development pipeline of a further seven GW, which will increase the group’s project pipeline there to 24 GW.
>> Read here: RWE doubles profits – More investments in renewable energies
Germany wants to convert its energy supply to renewable energies, but is currently struggling with the failure of gas supplies from Russia. Gas was to serve as a bridging technology after coal and nuclear power were gone.
Against this background, the activist RWE shareholder Enkraft criticized the move: “It is completely incomprehensible that the largest German energy supplier is carrying out a seven billion euro company purchase in the USA during the greatest energy crisis in Germany. In Germany, electricity customers no longer know how they want to pay the electricity prices, and Mr. Krebber goes shopping in the USA with the high profits.” Enkraft holds 0.15 percent in RWE.
Residual financing through loans
RWE expects the takeover to be completed in the first half of 2023. Con Edison Clean Energy is expected to contribute an operating result (Ebitda) of USD 600 million to RWE’s profit in the first year.
>> Read here: Divided energy world – Why RWE makes billions in profits while Uniper needs to be rescued
The group had already planned 15 billion euros for investments in “green energies” in the USA. “I am pleased that QIA is supporting RWE’s ambitions to grow faster and stronger with additional equity,” said Krebber.
RWE wants to finance the part of the purchase price that QIA does not pay with loans. The dividend of 90 cents per share planned for 2022 should not be shaken.
More: “The threat is growing” – How endangered the critical infrastructure in Germany is
