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Written by Christoph Steitz, Tom Keckenhoff, Vera Eckert
FRANKFURT/ESSEN (Reuters) – E.ON is not interested in creating a pan-European power giant, its CEO told Reuters, adding that recent energy market turmoil could spur consolidation in the sector. He said he denied the suggestion that there was.
“Creating something equivalent to Airbus will only distract us from our real job,” Leonhard Birnbaum said in an interview, referring to the aircraft manufacturer jointly owned by the German, French and Spanish governments. . “There’s no benefit to it.”
Birnbaum added that E.ON, Europe’s largest energy network operator with a market capitalization of around 32 billion euros ($35 billion), was unlikely to be the subject of a bid itself.
“The best takeover defense is to extract maximum value from the company and grow,” he said shortly after announcing plans to significantly increase investment to 42 billion euros over the next five years. “And we do both.”
Europe’s energy sector has undergone major changes since the once-close energy relationship with Russia was severed in the wake of the Ukraine war. That triggered a supply crisis and soaring prices, prompting several governments to bail out or take stakes in power companies and critical energy infrastructure.
At the same time, oil majors are actively entering the renewable energy space, increasing speculation about a deal being struck.
Birnbaum said Russia’s invasion of Ukraine highlighted the need for closer cooperation in Europe in areas such as cybersecurity, and energy was an example of where this was already happening.
Therefore, the benefits of integrating large cross-border companies are limited, said the 57-year-old.
Similarly, Birnbaum himself sees little value in spending large sums on mergers, saying that E.ON’s investment drive is primarily focused on growing its own business, with acquisitions specific to the group. It will be done only to add skills, he said, “not to strengthen the organization.” Bigger”.
Birnbaum warned that E.ON could spend even more than the 42 billion euros planned between 2024 and 2028, but this would depend on a favorable regulatory environment.
E.ON operates 1.6 million kilometers (994,000 miles) of gas and electricity networks, serving approximately 48 million customers in Europe. Birnbaum said this area will continue to be a focus.
The company revamped itself in 2018 by agreeing to buy key assets from Innogy, a former division of RWE.
Mr Birnbaum said he remained satisfied with the group’s structure, which mainly consists of the grid and low-margin energy retail businesses, adding that the idea of an eventual breakup had lost momentum.
(1 dollar = 0.9161 euro)
(Reporting by Christoph Steitz, Tom Keckenhoff and Vera Eckert; Editing by Mark Potter)
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