E.ON will focus on renewables, distribution networks, and customer solutions and form a new independent company merging its conventional generation, global energy trading, and exploration and production businesses.
A majority of this new firm, which will be publicly listed, will be spun off to E.ON shareholders in 2016.
E.ON SE CEO Johannes Teyssen said: "We are convinced that it’s necessary to respond to dramatically altered global energy markets, technical innovation, and more diverse customer expectations with a bold new beginning.
"We firmly believe that creating two independent companies, each with a distinct profile and mission, is the best way to secure our employees’ jobs. Our new strategy therefore isn’t a job-cutting program."
E.ON said it would take required steps for the listing of the new company in 2015 and expects to carry out the spinoff after approval by the E.ON shareholders meeting in 2016.
E.ON plans to take new approaches to develop each of its three core businesses – renewables, distribution networks, and customer solutions — with an investment of about €0.5bn, an addition to the previously planned 2015 capex of €4.3bn for next year.
About 40,000 employees would remain with E.ON while the remaining 20,000 would join the new company.
Meanwhile, the company expects to incur impairment charges of €4.5bn ($5.6bn) in the fourth quarter of 2014, which would result in E.ON reporting substantial negative net income.
E.ON’s supervisory board had also approved a proposal to pay a €0.50 per share dividend for 2014 and 2015, down from €0.60 euro paid for 2013.
Image: E.ON operates hydropower plant in Eitting, Germany. Photo: courtesy of E.ON SE.
