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​German energy company Innogy welcomes regulatory approval for SSE merger

Xinhua Financein BERLIN
2018-10-11 08:45

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The German renewable energy provider Innogy welcomed a decision by antitrust authorities on Wednesday to approve the merger of its British subsidiary with rival Scottish and Southern Energy (SSE).

"The final approval by British competition authorities today is a further important milestone in the creation of a new entity which will combine the best of both companies to meet changing customer expectations," Innogy Head of Sales Martin Herrmann told press.

"We will continue to work on taking the necessary measures to launch the new company," Herrmann added.

By officially greenlighting the Innogy-SSE merger on Wednesday, the British Competition and Markets Authority (CMA) confirmed an earlier preliminary verdict that the development posed no antitrust-related risks to consumers due to the presence of several other industry rivals.

The newly-formed joint venture is intended to be listed on the London Stock Exchange with Essen-based Innogy retaining a minority stake of 34.4 percent of shares.

Once completed, the merged entity will reach 11.5 million customers in the United Kingdom, making it the country's second largest energy company after Centrica subsidiary British Gas.

Innogy has recently also announced that it will join forces with two Japanese partners to develop a brand-new 2.3-billion-euro (2.64 billion U.S. dollars) wind energy project off the North East coast of Britain. The "Triton Knoll" offshore wind park has a planned capacity of 860 megawatts from 2021 onwards, making it one of the largest of its kind in the world. The British expansion drive of the company comes in spite of commercial risks posed by "Brexit" and looming dismantling of Innogy in a major German energy sector reshuffle.

Rival energy provider E.ON has reached an agreement with RWE to acquire its 76.8 percent stake in Innogy. If E.ON succeeds in acquiring the remainder of Innogy shares from minority investors as planned, it will take over Innogy's lucrative grid business, while the firm's renewable energy generation becomes concentrated under the corporate umbrella of its mother corporation RWE. As a consequence, Innogy will cease to exist as an independent company.
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