German energy giant E.ON has officially separated its fossil fuel assets into a new company, dubbed Uniper.
The move, which became effective on January 1st, will see the energy company focus on renewables, energy networks, and energy efficiency services. Meanwhile, the independent Uniper will assume control of the company’s fossil fuel and hydro assets, as well as its global energy trading activity.
Johannes Teyssen, chief executive of E.ON, said the move, which was first announced in 2014, would make E.ON and Uniper more “agile” and give each company the best chance of becoming a leader in its own sphere.
“This liberates us from continually having to make compromises,” he said in a statement. “Our ambition is for both companies, which soon will be legally independent of one another, to become leading players in their respective energy worlds.”
E.ON announced the split a year ago in response to what it described as “dramatically altered global energy markets”. The company’s fossil fuel generation assets have been badly impacted by the German government’s clean energy strategy, which has given renewables priority access to the grid.
The move sees E.ON established as one of the largest green infrastructure companies in Europe. A focus on renewables acknowledges “the growth potential created by the transformation of the energy world”, the company said when first announcing the split.
Meanwhile, Uniper says its conventional energy generation portfolio of around 40 gigawatts capacity will continue to play a key role in the energy systems of many countries.
“Ensuring that people have a secure and cost-effective supply of power and gas will remain a crucial task,” said Uniper chief executive Klaus Schäfer in a statement. “That’s what Uniper is all about.”
The full spinoff of Uniper will likely take place later this year, when E.ON shareholders are expected to approve the move at a meeting in June. E.ON will then sell its majority stake in Uniper, the company said, with it also planning to part with its remaining stake over the medium term.
Uniper will operate from E.ON’s previous headquarters in Dusseldorf, west Germany, while E.ON will move to a new campus in nearby Essen.
The move comes just weeks after rival German energy giant RWE announced similar plans to split the company into clean energy and fossil fuel operations.