ESSEN, Germany (Reuters) - E.ON’s (EONGn.DE) chief executive promised a steady increase in shareholder payouts on Wednesday, seeking to convince investors of a planned deal to break up rival Innogy (IGY.DE) with peer RWE (RWEG.DE).
“Thanks to the considerable synergy potential with Innogy, we intend to achieve value growth starting in the second year after the transaction closes,” Johannes Teyssen told shareholders at the group’s annual general meeting.
“As a result, we expect the dividend to increase year after year,” he added.
Closing of the complex transaction that was first announced in March and includes a 4.9 billion euro ($5.8 billion) bid to Innogy’s minority shareholders is expected in the second half of 2019.
On Friday, Teyssen and his counterparts at RWE and Innogy — Rolf Martin Schmitz and Uwe Tigges — will meet with trade unions to discuss the deal’s impact on jobs, with labor sources saying that a basic framework agreement could be reached.
Unions are demanding that the up to 5,000 job cuts E.ON foresees as part of the asset swap be realized without forced layoffs. Teyssen has said he is confident that can be done.
($1 = 0.8420 euros)
Reporting by Tom Kaeckenhoff; Writing by Christoph Steitz; Editing by Arno Schuetze and Maria Sheahan