Germany’s RWE buys Con Edison clean energy


Firstly, Germany’s largest power producer RWE has agreed to buy Con Edison’s Clean Energy Businesses for $6.8 billion, nearly doubling RWE’s renewables portfolio in the United States, the world’s second-biggest renewables market.

Secondly, the purchase will be partly funded by RWE issuing a $2.43 billion convertible bond to a Qatar Investment Authority unit, through which the QIA will become a 9.1% shareholder in RWE.

Thirdly, Con Edison said it was scrapping plans to issue up to $850 million in new shares this year and withdrawing equity guidance for the next two years. It said the deal would allow it to focus on its core utility business and New York’s clean energy shift.

Clean energy portfolio

Moreover, the transaction will nearly double RWE’s U.S. renewables portfolio to more than 7 gigawatts (GW) and grow its regional project pipeline by 7 GW to more than 24 GW.

Also, after the takeover, solar will account for 40% of RWE’s U.S. portfolio, up from 3% now, presentation slides showed.

Our equity capital measure is the basis for financing the acquisition of Con Edison CEB and of the additional green growth in the years to come.

RWE Chief Executive Markus Krebber said.

In addition, the deal will make RWE the fourth-largest renewables player in the U.S. market. It plays a key role in its green expansion, though still far behind largest player NextEra, which has some 58 GW of generating capacity.

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RWE at the United States

Additionally, RWE’s expansion in the U.S. comes as Germany is battling the impact of a complete halt in Russian gas supplies. It has already triggered the nationalisation of its smaller competitor Uniper.

QIA CEO Mansoor bin Ebrahim Al-Mahmoud said it was proud to support RWE’s efforts to become a global renewables leader. QIA’s investment expands Qatar’s relationship with Europe’s largest economy, which already includes stakes in Volkswagen, Deutsche Bank and Porsche.

Finally, the deal, will be earnings accretive right away, giving RWE additional core earnings (EBITDA) of $600 million a year. Also, it comes nearly a year after RWE fleshed out its global renewables roadmap. It includes 50 billion euros ($49 billion) of gross investments by 2030, with 15 billion earmarked for the United States.

Read more about RWE, here.

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