RWE will transfer its renewables, grids and retail operations in Germany and abroad to the new subsidiary and list it on the stock market during 2016.
RWE intends to offer some 10 percent of the new company's share capital to the public in connection with a capital increase.
The new company will probably be headquartered in Essen. About 40,000 of RWE’s 60,000 staff would be employed by the new company, according to Financial Times which also reported that half of proceeds raised from the listing of the new company will be invested in renewables.
The parent company will focus on conventional power generation and energy trading.
The plans to split the company are subject to approval by RWE’s supervisory board, which is due to meet on December 11.
Response to transformation
Peter Terium, CEO of RWE, said: “The Group's restructuring is our response to the transformation of the European energy landscape. We are creating two viable companies under one roof. The new subsidiary will have its own access to the capital market and improve our growth prospects. At the same time, we are convinced that conventional power generation will remain an irreplaceable partner for renewable energy for decades to come. Our conventional power stations are the backup for renewables.”
Bear all costs
Terium stated the group's new set-up would not impact its nuclear liabilities, pledging it would stand by its responsibility to bear all the costs connected to the shutdown of its plants. “This will not be affected by the new structure. On the contrary, the shares of the new subsidiary will be an asset that will make it easier for us to fund provisions in the future if necessary, whatever the circumstances.”
RWE’s proposal to split the company into two is similar to Eon’s plans from last year to spin off power plants, energy trading and oil and gas activities into a separate unit, Uniper.