RWE to transfer renewables, grids and retail activities to new subsidiary

German energy group RWE is planning to transfer all of its renewables, grids and retail operations business to a new subsidiary, which is likely to be listed on the stock market by next year.

The new unit, which will have separate access to the capital market, is expected to start operations as an independent firm in the course of 2016.

With the move, the company aims to build a decentralised energy group, which will look after the traditional power generation and energy trading business.

RWE will retain majority of the stake in the new company, which is expected to be headquartered in Essen.

The renewable division in the new subsidiary will have a portfolio of over 3.5GW electricity generation capacity and a strong wind power base.

With an up-to-date 550,000km long distribution network, the new unit expects to be one of the resourceful operators in Central Europe.

The retail business unit of the new subsidiary will offer service to more than 23 million customers in 12 European markets.

Moreover, the new company expects to generate external revenue of over €40bn and EBITDA of over €4bn.

RWE currently employs nearly 60,000 staffs, of which 40,000 will be transferred to the new company.

RWE CEO Peter Terium said: "The Group’s restructuring is our response to the transformation of the European energy landscape.

"We are creating two viable companies under one roof. The new subsidiary will have its own access to the capital market and improve our growth prospects.

"At the same time, we are convinced that conventional power generation will remain an irreplaceable partner for renewable energy for decades to come. Our conventional power stations are the backup for renewables."

The company stated that its nuclear energy sector would not be affected by the new structure.

RWE expects to offer around 10% share of the new company to the public by next year.

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Source:

https://www.rwe.com/web/cms/en/113648/rwe/press-news/press-release/?pmid=4014308