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RWE pledges higher dividends after Innogy break-up deal

Reuters  |  ESSEN, Germany 

By Christoph and Tom Käckenhoff

ESSEN, (Reuters) - German utility on Tuesday promised shareholders higher payouts following a landmark deal to break up its business and split its assets with rival to become Europe's third-largest

carved out and listed in 2016, hoping to extract more value from its networks and renewables assets, the most promising areas of the crisis-ridden utility sector. Since then, it tried to find a buyer for its remaining 76.8 percent stake.

The deal with E.ON, announced on Sunday, will result in gaining control of Innogy's and E.ON's renewable units, turning one of Europe's largest CO2 emitters into the continent's No.3 group after Italy's and Spain's

"In 2017, our goal was to strategically reposition and consolidate its finances. We were successful in both of these undertakings," said in a statement. "We are in good shape again."

The group said the ordinary dividend was expected to rise to 0.70 euros ($0.86) per share in 2018, up from 0.50 euros in 2017, with a further increase planned in 2019. The total dividend payout for 2017 also includes a 1.00 euro special dividend due to a nuclear fuel tax rebate.

Analysts polled by Reuters, on average, had expected ordinary dividend to remain stable at 0.71 euros per share for 2018 and 2019. late on Monday also said its dividend would rise in 2018.

E.ON, which also released a strong set of annual results late on Monday, will keep some renewables assets as part of the deal, most notably its 1.3 billion pound ($1.8 billion) offshore wind park project Rampion off the coast in Britain.

Shares in were indicated 2 percent higher at the top of the German blue-chip DAX index ahead of the market open at 0800 GMT. and were both seen 0.5 percent lower.

On Monday, Germany's three largest utilities added 4.3 billion euros in market value between them.

($1 = 0.8112 euros)

($1 = 0.7204 pounds)

(Editing by Maria Sheahan, editing by Louise Heavens)

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

First Published: Tue, March 13 2018. 13:10 IST