The Court of Justice of the European Union has upheld the European Commission’s approval of a major restructuring of Germany’s energy sector, bringing to a close a series of legal challenges brought by municipal utilities against one of the most complex transactions in recent years.
In its latest judgments, the Court confirmed that E.ON’s acquisition of the distribution and retail energy business, along with certain generation assets, of Innogy was compatible with EU competition law. The ruling aligns with earlier decisions by the General Court and reinforces the Commission’s original assessment of the transaction.
The case forms part of a broader asset reorganisation agreed in 2018 between E.ON and RWE, involving a multi-step exchange of assets designed to reshape their respective business models. Under this arrangement, E.ON focused on energy networks and retail supply, while RWE consolidated its position in electricity generation. A third element of the deal included RWE acquiring a minority stake in E.ON.
The European Commission reviewed and approved the key components of the transaction, concluding that they did not raise competition concerns. However, the decisions were challenged by several German municipal energy providers, which argued that the restructuring would harm competition in energy markets.
Both the General Court and, subsequently, the Court of Justice rejected those claims. A central issue in the proceedings was whether the different elements of the asset swap should be treated as a single concentration for the purposes of EU merger control. The Court confirmed that they should not. It held that the transactions did not amount to a unified operation aimed at transferring control to a single undertaking, but rather constituted separate deals between independent companies.
This finding proved decisive. By assessing each transaction individually, the Court endorsed the Commission’s approach and concluded that there had been no manifest error in its competitive analysis. The judges also dismissed the appeals brought by nine municipal authorities, thereby definitively confirming the legality of the Commission’s approval of the E.ON–Innogy transaction.
The ruling provides important clarification on how complex, multi-step transactions are assessed under EU merger rules. In particular, it confirms that not all interconnected deals will be treated as a single concentration, even where they form part of a broader strategic arrangement.