BERLIN, Aug. 30 (Xinhua) -- German energy provider Innogy has secured a first approval from regulatory authorities to proceed with its planned merger with British rival Scottish and Southern Energy (SSE), the Essen-based RWE subsidiary announced on Thursday.
A spokesperson for Innogy welcomed the decision as allowing it to improve profitability of its local Npower subsidiary in the highly-competitive British electricity- and gas markets. The company said that it planned to complete the transaction by early 2019 at the latest.
"We are convinced that the new corporate entity will combine the best of both companies in order to meet both changing expectations from customers and the challenges of the market," a statement by Innogy head of sales Martin Herrmann read.
The merged energy provider is intended to be listed on the London Stock Exchange with Innogy retaining a minority stake of 34.4 percent of shares. Once completed, the Innogy-SEE joint venture will reach 11.5 million customers in the United Kingdom, making it the country's second largest energy company after Centrica subsidiary British Gas.
Nevertheless, Innogy told press that local competition and markets authority (CMA) did not perceive a risk that the merger would violate antitrust principles given the presence of several other industry rivals.
Innogy has recently announced that it will join forces with two Japanese partners to develop a brand-new 2.3-billion-euro (2.69 billion U.S. dollars) wind energy project off the North East coast of Britain. The "Triton Knoll" offshore wind park has a planned capacity of 860 megawatts from 2021 onwards.
The British expansion drive of the company comes in spite of commercial risks posed by "Brexit" and looming dismantling of Innogy in a major German energy sector reshuffle.
Rival energy provider E.ON has reached an agreement with RWE to acquire its 76.8 percent stake in Innogy. If E.ON succeeds in further acquiring the remainder of Innogy shares from minority investors as planned, it will take over Innogy's lucrative grid business, while the firm's renewable energy generation becomes concentrated under the corporate umbrella of its mother corporation RWE. As a consequence, Innogy will cease to exist as an independent company.
