Renewable energy property Con Edison sold to German giant for $6.8 billion in one of the biggest green deals ever in the US

RWE AG agreed to pay $6.8 billion for Edison merge Inc.’s renewable energy assets. in one of the biggest-ever green deals in the US, sparking criticism that Germany’s biggest utility company should focus on its domestic business.

RWE has benefited from market turmoil in Europe’s electricity and gas markets since Russia went to war with Ukraine. The company has advanced earnings outlook for the year and set aside up to 15 billion euros ($14.7 billion) to invest in the US as part of its Green Growth strategy, which projects global spending of 50 billion euros by 2030.

The deal announced Saturday will nearly double RWE’s renewable energy portfolio in the US to more than 7 gigawatts. But an activist investor with about 1 million RWE shares said the company should focus instead on supply and home security.

Benedikt Kormaier of Enkraft Capital said: “It is completely inconceivable how Germany’s largest energy company was able to spend 7 billion euros on an M&A deal in the US in the midst of the biggest energy crisis that has ever happened. Germany has seen it.”

“Instead of extracting a portion of the profits from the winds, it may be more useful to force RWE to invest the profits in German energy infrastructure,” he said.

Financing for the Con Ed transaction will initially be provided by a bridge loan, which will be partially refinanced by convertible bonds to a subsidiary of the Qatar Investment Authority totaling original is 2.43 billion euros.

The deal “is a major driver of RWE’s green expansion in the United States, one of the most attractive and fastest-growing markets for renewable energy,” said CEO Markus Krebber.

Con Edison, which provides electrical service in New York, parts of New Jersey and Pennsylvania as well as to wholesale customers, has a market value of approximately $30.4 billion. The company announced in February that it is strategy discovery alternatives to the clean energy business.

In a separate statement, Con Edison said it intends to abandon its previously announced plan to issue up to $850 million in common equity this year and withdraw its share guidance for 2023 and 2024. .

“The transaction we announce today will allow Con Edison to focus strongly on our core utility businesses and the investments needed to lead the transition to full clean energy. New York’s ambitions,” said Con Edison CEO Timothy Cawley.

Barclays is the financial advisor to Con Edison, while Latham & Watkins LLP is its legal counsel.

– With support from Walid Ahmed, Brian Eckhouse and Eyk Henning

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