German utility RWE AG agreed to buy Consolidated Edison Inc’s renewable energy assets for US$6.8 billion in one of the biggest green deals in US history.
RWE is one of Germany’s main energy providers, with production historically linked to coal, which placed it among the country’s largest carbon dioxide polluters. The group has accelerated its diversification into renewables in recent years.
The deal almost doubles RWE’s renewables portfolio in the US to more than 7 gigawatts, the company said in a statement.
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Con Edison’s clean energy division “is a leading operator and developer of renewable energy plants in the United States, with about three gigawatts (GW) of operating capacity, thereof 90 percent in solar energy, and a strong development pipeline of more than seven GW,” RWE said in a statement.
The financing is initially to be provided by a bridge loan, partly refinanced by a convertible bond to a subsidiary of the Qatar Investment Authority with an aggregate principal amount of 2.43 billion euros (US$2.38 billion).
The deal “is a major boost for RWE’s green expansion in the US, one of the most attractive and fastest growing markets for renewable energy,” RWE CEO Markus Krebber said in the statement.
“The unique combination of complementary portfolios in onshore wind, solar and batteries creates one of the leading renewable companies in the US market,” he said.
RWE is targeting carbon neutrality by 2040.
RWE has been benefiting from the market turmoil in Europe’s power and gas markets since Russia waged war on Ukraine. The German utility raised its earnings outlook for the year to reflect expectations 30 percent higher than a previous forecast.
The company had earmarked up to 15 billion euros for investment in the US as part of its “growing green” strategy, which envisages global investment of 50 billion euros by 2030.
Con Edison, which supplies electricity to New York, New Jersey and Pennsylvania, as well as to wholesale customers, has a market value of about US$30.4 billion. The company said in February it was exploring strategic alternatives for the clean-power business.
In a separate statement, Con Edison said it intends to forgo a previously announced plan to issue up to US$850 million of common equity this year, and withdraw its equity guidance for next year and 2024.
“The transaction we announced today will allow Con Edison to sharply focus on our core utility businesses and the investments needed to lead New York’s ambitious clean energy transition,” Con Edison CEO Timothy Cawley said.
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