Germany's RWE buys Con Edison clean energy in $6.8b US shift

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.

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 per cent shareholder in RWE.

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.

The transaction will nearly double RWE's US renewables portfolio to more than seven gigawatts (GW) and grow its regional project pipeline by seven GW to more than 24 GW.

After the takeover, solar will account for 40 per cent of RWE's US portfolio, up from three per cent 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.

"I am delighted that QIA is supporting RWE’s accelerated growth ambitions with their capital commitment," Krebber added in a statement released late on Saturday.

The deal, which is expected to close in the first half of 2023, will make RWE the fourth-largest renewables player in the U.S. market, which plays a key role in its green expansion, though still far behind largest player NextEra, which has some 58 GW of generating capacity.

US expansion

RWE's expansion in the United States comes as Germany is battling the impact of a complete halt in Russian gas supplies, which has already triggered the nationalisation of its smaller competitor Uniper.

RWE also confirmed plans to pay a dividend of 0.90 euro per share for 2022. — Reuters