March 12 (UPI) -- German utility company E.ON is now in control of the renewable energy segment created by its rival, RWE, in a landmark, multibillion-dollar deal, they said.
In a joint statement, E.ON said it reached an agreement in principle with RWE to acquire more than three quarters of the stakes in renewable energy entity Innogy, an offshoot from RWE.
Germany's energy sector is shifting focus away from nuclear power and fossil fuels to one focused more on renewables, leaving conventional-focused energy companies like RWE scrambling to catch up. Germany as a whole has one of the greener economies in Europe and RWE already moved in the low-carbon direction by working with port officials to create infrastructure to fuel vessels with cleaner-burning liquefied natural gas.
Saying one year ago that it was "back on track," RWE said green energy division Innogy put the parent company on solid financial ground.
The agreement on Innogy, announced Sunday, transfers "most" of E.ON's renewable business to RWE and the "entire" renewable business of Innogy, though E.ON would be in control of the green entity as its largest stakeholder.
"The transaction further provides for a cash payment from RWE to E.ON of $1.8 billion," the announcement read.
In the wake of Japan's nuclear disaster in 2011, German Chancellor Angela Merkel ordered eight of the country's 17 nuclear reactors closed by the end of that year and a total shutdown by 2022. More than halfway through the transition, RWE said last year it was transitioning from an electricity producer to a company focused more on the security and reliability of energy supply.