E.ON has announced the successful close of the syndication of EUR5 billion (US$5.88 bilion) financing for its acquisition of Innogy, an energy company based in Essen, Germany, with revenue of around EUR44 billion (US$54.3 billion) (2016), more than 40,000 employees and activities in 16 countries across Europe.
E.ON is acquiring the company in two steps. The first is the acquisition of RWE's 76.8% stake in Innogy, to which RWE agreed in exchange for a stake in E.ON, most of the company's renewables business and many of Innogy's assets. The second involves a public takeover offer for the remaining Innogy stakes, which E.ON launched in April.
The EUR5 billion facility will be used to fund the acquisition of Innogy shares which are not held by RWE.
The financing consists of a EUR3 billion (US$3.52 billion) bridge loan and a EUR2 billion (US$2.35 billion) term loan with a five-year maturity.
E.ON invited core relationship banks to participate in the syndication with a ticket of EUR400 million (US$470.56 million) each. All invited banks participated, leading to a substantial oversubscription. Prior to syndication, the financing commitment had been provided by BNP Paribas as sole underwriter.
The transaction is set to transform the German energy sector, with Innogy to be fully integrated into the E.ON Group, and the renewables businesses of E.ON and RWE to be brought together under the umbrella of RWE.
It is expected to close in 2019. The acceptance period of the public takeover offer ends on 6 July 2018.