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The European Commission is expected to approve Eon’s acquisition of the majority of shares in Npower’s parent company Innogy this week.
The deal will mean Eon eventually takes over fellow big six supplier Npower, resulting in the big six becoming the big five.
There were fears the deal would not be approved before the UK’s planned departure from the European Union on 31 October, but Utility Week understands the EU Commission has now informed both sides it has reached its decision.
The deal will see Eon, which owns Eon Energy, acquire almost 77 per cent of all shares in Innogy from RWE. Upon completion of the voluntary public takeover offer, Eon will receive a further 9.4 percent of the shares in Innogy.
The German-owned energy giant has already acquired 3.8 per cent of shares in Innogy via the stock market which means it will hold a total of 90 per cent of all shares in Innogy and thus fulfilling the necessary requirements for a merger squeeze-out under the German Transformation Act, under which minority shareholders are obliged to sell to Eon.
It is thought that acquiring the minority shareholders could take anywhere between three to 12 months.
Furthermore, it is understood there will be a limit on integration while there are still minority shareholders and therefore the Npower brand will remain for the time being.
Until the UK’s planned departure from the EU on 31 October, the deal does not need separate competition approval from the Competitions and Market Authority (CMA).
An industry source however said it was “inconceivable” that the CMA would not have been asked its opinion by the European Commission.
The source also told Utility Week that Michael Lewis, Eon’s current chief executive, will continue in his role after Npower is absorbed.
The UK energy market is currently undergoing sizeable changes, with challenger brand Ovo Energy recently announcing it has agreed a deal to acquire SSE’s retail arm for £500 million.
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