* To take part in consolidation in core markets medium-term
* No comment on potential minority stake in Innogy
* Analysts, investors have pointed to RWE/Uniper tie-up
(Adds quote from CEO, context)
By Christoph Steitz and Tom Käckenhoff
FRANKFURT/DUESSELDORF, Germany, March 28 RWE
will play an active role in consolidation of the power
generation sector but will favour cost discipline over
large-scale M&A as Germany's biggest power producer goes on the
offensive after years of crisis.
RWE, Germany's third-largest energy group by market value,
last October listed its healthy assets in a new company Innogy
in response to a sector crisis that also forced peer
E.ON to break up its business.
The move brought in fresh capital without diluting its
equity, giving RWE room to manoeuvre after years of falling
wholesale power prices and Germany's decision to exit nuclear
almost destroyed its traditional business model.
RWE will now concentrate on growing its business of
providing safe round-the-clock power supply, something that
intermittent renewable sources cannot do, Chief Executive Rolf
Martin Schmitz said at the group's capital markets day.
"We can do this either organically or through selective
opportunistic acquisitions should any of the existing players
decide to partially exit the market at attractive prices," he
The focus will be on RWE's core markets - Germany, Britain
and the Netherlands, RWE said.
Finance chief Markus Krebber cautioned there were no
concrete M&A plans and that the company would take a "very
disciplined and selective approach" to any M&A activity.
Schmitz fuelled M&A speculation in mid-March when he said
RWE was considering several strategic options, including tie-ups
with rivals and the sale of a stake in Innogy, in which RWE owns
Analysts and investors have highlighted the possibility of
RWE taking over Uniper, the former power plant and
energy trading business spun off from E.ON, which still owns
"A tie-up of RWE and Uniper could lead to synergies in the
operation of power plants," said Thomas Deser, senior fund
manager at Union Investment. "But such a move would have to
clear regulatory hurdles."
Schmitz declined to comment on whether RWE would also be
comfortable with owning a minority in Innogy, saying only that
RWE would manage its stake in the networks, renewables and
retail group in a way that would maximise value for investors.
He also ruled out selling power plants, adding Germany's
biggest power producing group felt comfortable with its current
setup of 41.9 gigawatts (GW) of generation capacity, more than
half of which are from lignite and gas.
(Editing by Maria Sheahan and Susan Thomas)