RWE completes ConEd Clean Energy deal
German renewables giant RWE has closed its $6.8 billion acquisition of Con Edison Clean Energy Businesses (CEB).
The newly named business, called RWE Clean Energy, operates a portfolio of 8GW of renewable energy projects and has a development platform of more than 24GW. The transaction makes RWE the fourth-largest renewable energy company in the US, and its second-largest solar owner and operator.
Mark Noyes, previously president and chief executive of Con Edison CEB, is tasked with leading RWE Clean Energy, with RWE Renewables Americas’ Ingmar Ritzenhofen and Andrew Flanagan acting as CFO and chief development officer, respectively. Con Ed’s Akshaya Bhargava will work as COO.
“With the creation of RWE Clean Energy, we are significantly stepping up RWE’s presence in the U.S., one of the most attractive and fastest growing markets for renewable energy in the world. With bringing together two strong teams and combining onshore wind with solar projects, we are setting the path to significantly grow our portfolio,” said Markus Krebber, chief executive of RWE.
The purchase price for acquiring Con Edison CEB is based on an enterprise value of $6.8 billion. Financing of the acquisition and the additional growth are funded through debt instruments and an equity capital measure undertaken by RWE.
Equity was raised via issuance of a mandatory convertible bond to a subsidiary of Qatar Investment Authority. The mandatory convertible bond has an aggregate principal amount of €2.4 billion, and will be converted into new ordinary bearer shares, expected to represent just under 10% of RWE’s existing share capital (approximately 9.09% after conversion). Conversion is expected within the first quarter of 2023.
The deal marks a continuation of RWE expanding into the US. RWE had already earmarked up to €15 billion for investments in the US as part of its Growing Green strategy, which foresees global investments of more than €50 billion in its green portfolio by 2030.
The growth plans are backed by RWE Clean Energy’s project pipeline of more than 24GW in onshore wind, solar and battery storage. In addition, RWE is also expanding its global offshore wind activities in the US having secured sites with the potential to host a total of about 3.9GW (pro rata RWE) installed capacity in offshore wind.
“Together, we want to forge ahead with projects in established markets, but also in emerging markets like hydrogen, truly committed to making clean energy the number one energy source in the US,” added Noyes.