Germany's largest power supplier E.ON is quitting conventional energy to focus entirely on renewables. The overhaul comes amid mounting debt and as Germany gears up to phase out nuclear energy by 2022.
The energy giant announced plans to spin off its nuclear, oil, coal and gas operations - a move that will include selling its businesses in Spain and Portugal to Australian investment firm Macquarie for 2.5 billion euros ($ 3.11 billion).
"We are convinced that it's necessary to respond to dramatically altered global energy markets," the company's CEO Johannes Teyssen said in a statement late Sunday.
"E.ON's existing broad business model can no longer properly address these new challenges," he added. "Two separate, distinctly focused companies offer the best prospects for the future."
The new business model will also focus on distribution networks and customer solutions.
Germany goes green
The overhaul comes as Germany plans to wean itself off nuclear power and shift to renewable energy sources by 2022.
It also comes at a time, when European energy suppliers are experiencing a price slump on the wholesale electricity market, and as E.ON braces for impairment charges of 4.5 billion euros on its operations in southern Europe in the fourth quarter of 2014. The company is already struggling with massive debts.
The new spin-off branch will take over control of the traditional energy-generating activities in 2016. However, E.ON shareholders will continue to have a majority stake.
pad/uhe (Reuters, dpa, AFP)