RWE and Eon reach collective agreement for asset swap

A collective bargaining agreement for “future and job security” has been reached in Germany ahead of the planned asset swap between Eon and RWE.

The agreement which, Utility Week understands, only affects employees in Germany, was agreed with employers’ associations and trade unions Ver.di and IGBCE.

It includes provisions on “attractive severance payments” for employees leaving voluntarily, early retirement arrangements and the possibility of switching to a holding company for further employment and qualifications.

The agreement is subject to the antitrust approval of Eon’s acquisition of Innogy and will not become effective until the transaction is closed.

Arno Hahn, chief human resources officer and labour director of Innogy SE, said: “Almost a year after the signing of the collective policy statement in May 2018, we brought negotiations to a very successful end, all our expectations have been fulfilled.

“This is a key milestone to path the way into the future of both companies. The collective bargaining agreement ‘future and job security’ provides concrete terms for job security to Innogy colleagues when it comes to a transfer into the new Eon.

“I am delighted that we have achieved such a great solution for our employees.”

Johannes Teyssen, chief executive of Eon, said: “We are consistently implementing what we agreed with Ver.di and IGBCE in May last year with the participation of the Group Works Councils.

“With this agreement, we have reached another, particularly important milestone on the way to the planned integration of Innogy.

“Based on the proven agreements in both groups, we have created a new, forward-looking collective agreement for the new Eon.

“It gives all employees of Eon and Innogy the greatest possible certainty that the necessary job cuts will be made in a socially responsible manner and that we will continuously prepare our workforce for the challenges of the future.

“I am very pleased that we can continue the traditionally good cooperation of the collective bargaining parties in the design of the new Eon.”

The planned asset swap between Eon and RWE was approved by the Competition and Markets Authority in April and is currently awaiting the green light from the European Commission.

The deal will see RWE trade its 76.8 per cent interest in Innogy for a 16.67 per cent stake in Eon, its renewable portfolio and €1.5 billion in cash.

Last month Eon said the deal is “right on schedule” and expected to receive full regulatory approval in the second half of 2019.

In January Eon confirmed it does not expect “any material effect” on either the timing or delivery of the asset swap following the collapse of the proposed merger between Innogy’s UK retail arm Npower and SSE Energy Services.

Npower is owned by Innogy which is itself owned by RWE. Questions have been raised about the future of Npower following the news that the proposed merger with SSE’s British retail arm had been scrapped.

The deal, which had been given the go ahead by the Competition and Markets Authority, would have seen the big six energy suppliers reduced to the big five.

“Adverse developments” in the retail market and “regulatory interventions” such as the price cap have been cited as reasons behind the decision to call off the deal.