RWE is set to acquire Con Edison Clean Energy Businesses, a developer of renewable energy plants in the United States, for an enterprise value of $6.8 billion.
RWE and Con Edison have agreed on a purchase price based on an enterprise value of $6.8 billion. At a multiple Enterprise Value/EBITDA of 11x, this represents an attractive price. EBITDA of around $600 million from year one on, the acquisition is earnings accretive.
Con Edison Clean Energy Businesses, headquartered in Valhalla, New York, has about 3 gigawatts (GW) of operating capacity. Out of this, 90 percent of the total capacity is in solar energy. Con Edison has a development pipeline of more than 7 GW.
The transaction will make RWE the number 4 renewable energy company and the second largest solar operator in the United Statesy. The Inflation Reduction Act sets a stable and reliable 10-year framework for investments in clean energy.
Combining RWE’s and Con Edison CEB’s portfolios almost doubles RWE’s operating asset base in the U.S. to 7.2 GW. RWE’s U.S. presence becomes more widely spread across the vast majority of U.S. states. The unique combination of both businesses also leads to a perfectly balanced portfolio across onshore wind, solar and batteries.
A combined project pipeline of more than 24 GW in onshore wind, solar and batteries provides one of the largest development platforms for renewable energy in the U.S. RWE had already earmarked up to EUR 15 billion gross for investment in the U.S. as part of its Growing Green strategy, which envisages global investments of EUR 50 billion gross by 2030.
Con Edison CEB has about 500 employees with track record in developing, constructing and operating renewable energy projects. About 1,400 employees from both companies will form a high-performing team for supporting RWE’s growth plans in the U.S. in the years to come.
Closing of the transaction is subject to customary regulatory approvals and is expected to take place in the first half of 2023.
Markus Krebber, CEO of RWE: “Our equity capital measure is the basis for financing the acquisition of Con Edison CEB and of the additional green growth in the years to come.”
RWE has more than 30 projects in operation in the U.S., with a total installed generation capacity of 4.1 GW in onshore wind, solar and batteries. Prior to the transaction with Con Edison, the geographical footprint of RWE’s operating base includes much of Texas, with projects also in the states of New York, Pennsylvania, North Carolina, Georgia, Ohio, Indiana, Illinois, Oklahoma and Arizona.
In addition to onshore wind, solar and batteries, RWE is also developing offshore wind in the United States. The company, together with its joint venture partner National Grid Ventures, secured area OCS-A 0539 in the New York Bight offshore lease auction in the U.S. with the potential to host 3 GW of capacity, enough to power 1.1 million U.S. homes.
In addition, RWE has entered into a joint venture, New England Aqua Ventus, focused on floating offshore wind in the state of Maine.