FRANKFURT/DUESSELDORF, Germany RWE (RWEG.DE) signalled on Tuesday it would play an active role in consolidation of the power generation sector, eyeing deals in its core markets - Germany, Britain and the Netherlands - to bolster its business.
Germany's third-largest energy group could make "selective and opportunistic" purchases if competitors pulled out of the challenging sector and left behind assets at good prices, Chief Executive Rolf Martin Schmitz said at RWE's Capital Market Day.
Schmitz fuelled M&A speculation two weeks ago when he said RWE was considering several strategic options, including tie-ups with rivals and the sale of a stake in energy group Innogy (IGY.DE), in which RWE owns 76.8 percent.
Analysts and investor have highlighted the possibility of RWE taking over Uniper (UN01.DE), the former power plant and energy trading business spun off from larger peer E.ON (EONGn.DE), which still owns 46.65 percent.
"A tie-up of RWE and Uniper could lead to synergies in the operation of power plants," said Thomas Deser, senior fund manager at Union Investment. "But such a move would have to clear regulatory hurdles."
Schmitz declined to comment on whether RWE would be comfortable with owning a minority in Innogy, saying only that RWE would manage its stake in the networks, renewables and retail group in a way that would maximise value for investors.
He also ruled out selling power plants, adding Germany's biggest power producing group felt comfortable with its current setup of 41.9 gigawatts (GW) of generation capacity, more than half of which are from lignite and gas.
(Reporting by Christoph Steitz and Tom Kaeckenhoff; Editing by Maria Sheahan)