German energy company E.On SE says it has agreed to take over a big stake of utility company RWE’s unit innogy in exchange for a far-reaching range of assets from E.On’s renewable business, according to The Associated Press.
Bloomberg reported the deal would result in E.On cutting 5,000 jobs. RWE said it does not expect any job losses.
E.On announced the complex deal in a statement on Sunday, saying it is acquiring 76.8 percent of RWE’s stake in innogy in exchange for granting RWE an effective participation of 16.67 percent in E.On, according to the AP.
The company added: “E.On would transfer to RWE most of E.On’s renewables business.”
The agreement is considered a major restructuring of Germany’s energy market and comes in the wake of Chancellor Angela Merkel’s 2011 decision to abandon nuclear power and focus on renewable energy sources. Merkel made the policy switch after Japan’s Fukushima nuclear disaster.