August 21, 2019 / 3:11 PM / 25 days ago

RWE buys stake in Slovak energy firm ahead of Innogy breakup

FILE PHOTO: RWE logo in Essen, Germany, March 14, 2017. Reuters/Thilo Schmuelgen

FRANKFURT (Reuters) - RWE (RWEG.DE) on Wednesday said it had acquired a 49% stake in Slovak power supply and distribution group VSEH from subsidiary Innogy (IGY.DE), as part of a deal to break up Innogy’s assets with rival E.ON (EONGn.DE).

No terms were disclosed, but Innogy in a separate statement said it was able to secure an attractive price. E.ON will try to buy the stake from RWE next year, RWE said. The Slovakian government owns the remaining 51% in VSEH.

E.ON and RWE last year unveiled a deal to break up Innogy, which had been carved out from RWE in 2016. Under the deal’s terms, E.ON will get Innogy’s network and retail assets, while RWE will receive the renewable activities from Innogy and E.ON.

Innogy said VSEH would be disclosed retroactively as discontinued operations from Jan. 1, 2019, causing it to lower its outlook for the current year to about 2.2 billion euros ($2.4 billion) of adjusted earnings before interest and tax (EBIT) and about 800 million euros of net profit.

It previously expected adjusted EBIT of about 2.3 billion euros and net profit of about 850 million.

Reporting by Christoph Steitz, editing by Riham Alkousaa

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