German power and natural gas utility RWE has announced that it will enter into a partnership with Dutch utility Essent. The companies have reached agreement on the terms and conditions for a binding all-cash offer by RWE to the shareholders of Essent for the acquisition of all the issued and outstanding shares of Essent.

According to RWE, it will not be acquiring Essent’s electricity and gas distribution networks and waste management operations. Through the transaction, RWE will gain 5.3 million customers, of which approximately 250,000 are based in Belgium and one million in Germany.

Upon completion of the transaction, RWE will supply electricity to over 22.5 million and gas to approximately 12.5 million customers in Europe, strengthening its position in the European power sector, claims the company. Across Europe, the RWE Group will have total installed capacity of around 51GW.

The transaction will have an enterprise value of E9.3 billion, before deducting net indebtedness and assuming a 100% acceptance level by Essent shareholders.

The new organization will be led by an executive board of four members. Two executive board positions will be held by current Essent management and two will be held by RWE. Operationally, the executive board will report directly to the RWE executive board. The new supervisory board will have five members, with three members from RWE, one from the Central Works Council and an independent Dutch national.