RWE's U-Turn on Splitting Forced by Merkel's Love of Green Powerby
RWE AG surged in Frankfurt trading after a report that Germany’s largest power producer is considering spinning off its renewables and grid operations.
RWE, based in the western city of Essen, jumped as much as 8.5 percent, the biggest intraday increase in seven weeks. The stock was up 4.4 percent at 11.37 euros as of 12:55 p.m. More than 5.6 million shares had traded, or almost 80 percent of the daily three month average.
Chief Executive Officer Peter Terium intends to present the spinoff proposal to RWE’s supervisory board on Dec. 11 with plans to list renewables and the grid businesses while retaining conventional power generation, Rheinische Post reported, citing unidentified people close to the committee that oversees the management board.
RWE declined to comment on the report.
RWE, which is battling declining wholesale electricity prices, said earlier this year it wouldn’t rule out splitting up the company, a move competitor EON SE announced about a year ago in the most radical response to Germany’s Energiewende, the energy-policy shift that is forcing traditional utilities to shut nuclear reactors.