March 21, 2018 / 6:00 PM / in 5 months

Bavaria plans now to keep 1.44 percent stake in E.ON: source

MUNICH (Reuters) - The German federal state of Bavaria has dropped the idea of selling its 1.44 percent stake in E.ON (EONGn.DE) following the utility group’s deal with RWE (RWEG.DE) to carve up Innogy (IGY.DE), a government source said on Wednesday.

FILE PHOTO - General view of the headquarters of E.ON Climate and Renewables in Essen, western Germany March 9, 2016. REUTERS/Ina Fassbender

Bavaria’s Chief Minister Markus Soeder had said in January, before taking office, that he would look into the possibility of selling the stake - now worth around 300 million euros ($368 million) - to pay for a public housing program.

FILE PHOTO - New Bavarian State Prime Minister Markus Soeder taks his seat after his election in Munich, Germany, March 16, 2018. REUTERS/Michael Dalder

But a source familiar with the matter said this project could now be funded without raising cash from the E.ON stake.

Germany’s top two utilities on March 11 announced plans to break up Innogy, in a landmark deal that was welcomed by investors, sending shares in the companies involved sharply higher.

($1 = 0.8155 euros)

Reporting by Joern Poltz; Writing by Douglas Busvine; Editing by Edmund Blair

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