innogy SE submits reasoned statement

  • The Executive Board and the Supervisory Board do not give a recommendation to innogy’s shareholders

  • The Executive Board and the Supervisory Board believe that the consideration offered by E.ON is fair in its absolute value – however, a definitive assessment of the relative value of the offer is not possible due to private agreements between E.ON and RWE

  • In addition, one-sided disadvantages for innogy’s employees are feared: Conclusion of a balanced framework agreement with binding and reliable commitments remains uncertain

  • Long duration before completion of the overall transaction constitute considerable risks

Essen, 10 May 2018

Today, the Executive Board and the Supervisory Board of innogy SE (“innogy”) have published their joint reasoned statement pursuant to Section 27 of the German Securities Acquisition and Takeover Act (Wertpapiererwerbs- und Übernahmegesetz – WpÜG) on the voluntary public takeover offer of E.ON Verwaltungs SE (“E.ON”) dated 27 April 2018. After examining the offer document in depth, the Executive Board and the Supervisory Board do not issue any recommendation to innogy’s shareholders.

“Due to private agreements between E.ON and RWE, we aren’t able to conclusively assess whether the offer price altogether is fair,” says Uwe Tigges, Chief Executive Officer of innogy SE. “Irrespective of the offer price, we are extremely concerned that the job cuts planned by E.ON will be unilaterally pursued to the disadvantage of the innogy employees. There has been some movement in the talks with E.ON, especially in the last few days. However, we will measure the success of the negotiations solely by whether innogy’s employees obtain binding and reliable commitments for a fair integration process.”

“We are firmly convinced that an integration between innogy and E.ON can only be a success for everyone involved if all persons responsible consider it as a joint project and deal fairly with each other”, says Erhard Schipporeit, Chairman of the Supervisory Board of innogy SE. “The core region Rhine and Ruhr will benefit in the long term if the upcoming integration process between E.ON, RWE and innogy will be accomplished as smoothly and orderly as possible.”

Consideration fair, but conclusive assessment of the offer not possible

Under the agreement between E.ON and RWE dated 12 March, both companies aim at an extensive exchange of business activities and participations if the transaction is concluded successfully.

E.ON is to take over RWE’s 76.79% stake in innogy, whereas RWE is to obtain among other things all of E.ON’s major renewable energy activities and innogy’s renewable energy business, as well as a 16.67% minority stake in E.ON.

On the basis of the information available and taking into account the fairness opinions of the investment banks involved, the Executive Board and the Supervisory Board regard the price per innogy share offered by E.ON to be fair in absolute terms. However, if the extensive exchange of business activities between E.ON and RWE are taken into consideration, the Executive Board and the Supervisory Board are not able to conclusively assess whether the offer price is fair for the minority shareholders. Due to the private agreements, it is not possible to ascertain objectively whether the consideration agreed between E.ON and RWE for acquiring 76.79% of the shares in innogy matches the offer price or is higher or lower.

Binding commitments on innogy’s integration still not received from E.ON

The Executive Board and the Supervisory Board fear that innogy’s employees might suffer structural disadvantages compared with E.ON Group employees as part of an integration. Given these circumstances, the Executive Board and the Supervisory Board cannot support the transaction from the innogy employees' point of view without additional safeguards in favour of employees.

The joint statement welcomes the fact that E.ON intends to create competitive general conditions for innogy’s employees, respect the employees’ rights and wants to work constructively with innogy. Several talks were held with E.ON and RWE at innogy’s initiative to conclude a balanced framework agreement with reliable commitments for the integration process. These talks were also continued in the past few days. However, there has not been any legally binding agreement to date.

innogy and E.ON are two companies that are roughly of equal size in terms of market capitalisation, revenue and headcount. Consequently, innogy believes that such an agreement should ensure that the strengths of both companies are respected and that, where there are two people for one position, the most suitable employee ought to be chosen. The framework agreement should be monitored by an independent third party.

As long as there is no legally binding framework agreement with E.ON, the Executive Board and the Supervisory Board believe there is a great risk that qualified employees might leave innogy, especially since E.ON has so far not ruled out any dismissals for operational reasons. The Executive Board and the Supervisory Board advocate for any jobs cuts to be done in a socially acceptable manner and with the involvement of the works councils and trade unions.

Long duration before closure will unsettle employees and customers

According to the plans of E.ON and RWE, the potential transaction will not be closed until the end of 2019. That long period of time represents a considerable risk. E.ON thereby condones a situation where innogy’s employees will face uncertainty and qualified employees may leave the company in the time period until completion of the transaction.

Although innogy has competitive advantages over E.ON in many areas, E.ON has so far not given any commitment that these advantages will be taken into account in the integration process. By not taking them into account, economic inefficiencies, disadvantages for customers and negative consequences for shareholders would be accepted.

E.ON has also not been willing so far to commit to retaining innogy as a retail and partner brand, despite the fact that independent institutes attest that the brand has a more sustainable, more innovative and more customer-oriented image and a higher brand value than E.ON’s.

You can read the full reasoned statement of innogy’s Executive Board and Supervisory Board and find more information on the voluntary public takeover offer on the company’s website at:

It is explicitly pointed out that solely the reasoned statement of the Executive Board and the Supervisory Board is authoritative. The information in this press release does not represent any explanations on or additions to the content of the statement.