E.ON Spins Off Conventional Energy Business, Focuses on Renewables
European utility E.ON is spinning off its conventional generation, global energy trading, and exploration and production businesses as a new, independent company so that it can focus on three core businesses: renewables, distribution networks and customer solutions.
According to the company, the change in strategic direction will allow it to be more responsive to changing global energy markets, technical innovations and diverse customer expectations.
To develop its core businesses, E.ON will boost its investments for the next year by about $0.62 billion compared to the previously planned 2015 capital expenditure of $5.4 billion, with a particular emphasis on expanding its wind business in Europe and other selected markets. It will also strengthen its solar business and upgrade its energy distribution networks in its European markets and in Turkey.
E.ON’s strategic plan also includes the divestment of its businesses in Spain and Portugal, which it has agreed to sell to Macquarie, an Australian investment firm, for $3.12 billion. Macquarie had previously acquired E.ON’s gas transmission business in Germany.
E.ON is also exploring the disposal of its activities in Italy and will conduct a strategic review of its exploration and production business in the North Sea.
The majority of the new company’s capital stock will be transferred to its shareholders with the rest of the shares being offered up for sale. E.ON will be preparing for the new company’s initial public offering in 2015. The spinoff company will be headquartered in Germany’s Rhine-Ruhr region and employ about 20,000 people. For the time being, E.ON’s current reporting units will remain unchanged.
E.ON expects to carry out the spinoff after approval by the E.ON shareholders meeting in 2016.
- The Corporate Sustainability Professional's Guide to Better Data Management
- 2016 Energy and Sustainability Predictions Findings from Facilities Professionals
- 10 Tactics of Successful Energy Managers
- Four Key Questions to Ask Before Your Next Energy Purchase
- The New Energy Future - Challenges and Opportunities in Corporate Energy Management
- Smart Companies Utilize Integrated Energy Solutions
- Energy Manager Today Awards Top Products and Top Projects of the Year
- There’s Money in the Trash
- Strategies for a Successful EHS&S Software Selection
- Financing Environmental Resiliency and a Low-Carbon Future with Green Bonds