Yesterday the supervisory board of RWE approved continued corporate restructuring to respond to “the massive transformation of the energy market in recent years, and in RWE’s core markets in particular”. To streamline operations the RWE AG holding company will be transformed effective 1 January 2017 into an operating company with which several German RWE subsidiaries shall be merged.
1. Major Subsidiaries to be Integrated
Major companies that will be merged with the new RWE AG shall include in particular the supply and networks business as well as service companies. The distribution grid operator Westnetz GmbH will remain an independent company as the law requires that generation, supply and grids must remain separate due to unbundling requirements, RWE pointed out. Companies such as RWE Group Business Services GmbH, RWE IT GmbH and RWE Effizienz GmbH will also be integrated into RWE AG.
2. Companies “Currently” not Integrated
“Currently, RWE Generation SE/ RWE Power AG, RWE Innogy GmbH (the renewable energy subsidiary) and RWE Supply & Trading GmbH are not affected by the merging process with RWE AG”, RWE said, adding that RWE Generation SE would be integrated into RWE Power AG which would be renamed RWE Generation AG. This leaves RWE AG the option to spin off the conventional power business that has come under pressure as the German Energiewende (energy transition) favours renewable power by setting growth targets and providing financial support under the Renewable Energy Sources Act (EEG). As of 1 January 2016 RWE competitor E.ON will spin off its conventional business to a new company called Uniper. “We reserve the option of a spin-off, but do not pursue it actively”, Rheinische Post quoted RWE CEO Peter Terium as saying.
The above companies will remain legally independent, but shall each be steered by one COO at RWE AG level. The trading business will continue to be represented on the Executive Board by the CEO of RWE AG, Peter Terium. In total there will be seven members on the Executive Board instead of four.
3. Cost Savings and Financial Outlook
On Thursday 13 August 2015, CEO Peter Terium and CFO Bernhard Günther will present results for the first half of 2015 in a press conference call and an investor and analyst conference call (for more information, please see here).
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