German trade union, gov't welcome Eon acquisition of RWE subsidiary Innogy

BERLIN, March 12 (Xinhua) -- The planned acquisition of the RWE renewable energy subsidiary Innogy by its German rival Eon has been welcomed by Germany's influential trade union Verdi and the federal government on Monday.

Verdi chief Frank Bsirske, who also holds the position of vice-chairman on the RWE supervisory board, praised the widely-publicized energy sector deal as an example of positive corporate restructuring.

According to Bsirske, Eon and RWE would gain the opportunity to "build strong companies with more investing power, as well as creating new perspectives for future growth and jobs".

Similarly, the acting minister for economics Brigitte Zypries told press on Monday that it was principally desirable that there were "competitive and internationally-oriented energy producers in Germany".

If the deal allowed Eon and RWE to specialize more effectively in their respective businesses, this could "promote necessary investment in energy generation and distribution networks", Zypries said.

Eon wants to acquire Innogy completely in a first step of the announced deal and is offering RWE a stake in its mother corporation in exchange.

Eon would then take over Innogy's lucrative grid business while its renewable energy generation is concentrated under the corporate umbrella of RWE. As a consequence, the only two-year-old subsidiary Innogy would cease to exist.

The Federation of German Consumer Organizations (VZBV) expressed hope in the newspaper Handelsblatt that Eon would subsequently lower its energy prices, leading to savings for German households.

"Innogy is a relatively expensive basic supplier," a statement by VZBV director Klaus Mueller read.

Investors have also reacted with enthusiasm at the news with the share price for Innogy soaring by up to 15.55 percent on Monday morning.

The German magazine SPIEGEL cited analysts at the U.S. investment bank Morgan Stanley as saying that the energy sector deal was a "win-win" situation.

Innogy had recently made negative headlines after issuing a profit warning and experiencing a fall in its share price which forced chief executive officer (CEO) Peter Terium to resign.

Nevertheless, the interim CEO Uwe Tigges insisted during the presentation of Innogy's annual earnings figures on Monday that he was leading a "company in excellent health". Enditem