Restructuring a Utility: RWE's Carve-out of Innogy

By Stefan Reichelstein, Donna Bebb, Stephen Comello
2017 | Case No. SM278 | Length 15 pgs.

In 2016, the German utility RWE undertook a carve-out in which substantial parts of the company’s assets and liabilities were offered to the general public as part of an IPO. The case describes the developments in the German energy landscape that led RWE to this unusual move. The case also examines how investors responded to this carve-out in terms of the valuations attached to RWE and the new subsidiary.

Learning Objective

Explain why an established utility felt compelled to undertake a corporate reorganization that transferred its most valuable operating assets to a new subsidiary that was then taken public. Examine in what sense this move “unlocked value” for the utility’s shareholders in a rapidly changing energy industry.

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