German Energy Landscape Is Transformed Without German BanksBy and
Perella and BNP advised EON, and BofA and Citi worked with RWE
Year’s biggest German deal missing Deutsche Bank, Commerzbank
The deal that will transform Germany’s energy landscape is missing one key element: German banks.
EON SE this week agreed to acquire Innogy SE, valued at about 22 billion euros ($27 billion), from German rival RWE AG as part of a complex asset and share swap, overhauling the two companies and the country’s energy industry.
U.S. boutique bank Perella Weinberg Partners LP, along with BNP Paribas SA of France, advised Essen-based EON. Meanwhile Bank of America Corp. and Citigroup Inc., both U.S. behemoths, worked with RWE on the transaction, with Paris-based Rothschild & Co. providing a fairness opinion.
The investment banks on the deal stand to earn about 50 million euros to 70 million euros on each side of the transaction, according to preliminary estimates from New-York based research firm Freeman & Co.
Deutsche Bank AG, Germany’s biggest lender, and No. 2 Commerzbank AG, were conspicuously absent from the biggest transaction so far this year in the country and one of the largest European energy deals in years. The absence of the homegrown banks didn’t go unnoticed, with national daily Frankfurter Allgemeine Zeitung pointing out that German advisers missed out.
The Frankfurt-based bank, alongside JPMorgan Chase & Co., had advised Enel SpA on its failed pursuit of Innogy, according to people familiar. RWE’s advisers had entertained interest from other European rivals as they sought a buyer for its 77 percent stake in Innogy, with a focus on getting assets and not just cash.
The transaction marks the second big German utilities deal in less than a year for Perella, which is also advising Finnish utility Fortum Oyj on its plans to buy EON’s legacy fossil fuel and trading business Uniper SE.
EON will emerge from the deal, which values Innogy at about 43 billion euros including debt, as a company focused on selling power and gas to end users. RWE will buy assets with an enterprise value of about 17 billion euros from EON, according to people familiar, and own the combined renewable-generation businesses as well as a financial stake in EON.
— With assistance by Steven Arons, and Fabio Benedetti Valentini