Structural shake-up in store for EON

Structural shake-up in store for EON
Photo: DPA
The head of German energy giant EON is preparing the company for a radical restructuring course – including sell-offs or mergers for less profitable sectors, according to a Saturday news report.

According to news magazine Der Spiegel, all branches of the company – which is Germany’s largest energy provider – are set to come under close scrutiny over the next two to three years. Any areas that fail to meet management’s profit goals could be up for negotiation – including the company’s gas grid or its sprawling power distribution grid.

EON spokesman Carsten Thomsen-Bendixen would not comment on the plans Sunday, saying the company’s supervisory board was due to discuss them the following day.

Company CEO Johannes Teyssen is set to present his new corporate strategy on Wednesday, along with the company’s third-quarter results.

Under EON’s plan, the billions gained from company sell-offs would reportedly be invested in high-growth markets outside of Europe, such as China or Brazil. Some of those funds could also be used to cover potential profit losses in the coming years.

According to company calculations, EON expects that pre-tax profits could drop up to 30 percent without decisive action – despite generally good results for 2010.

Teyssen has been charting a course for the company that is markedly different from that of his predecessor, Wulf Bernotat – including an almost complete reshaping of the company’s board. For the first time ever, EON’s management team now includes both a woman, Regine Stachelhaus, and a non-German, Jørgen Kildahl of Norway.

The company has also given the German government clear signals on the nuclear power debate – and in August pressed Chancellor Angela Merkel to live up to her promise to extend the life of some of the country’s nuclear plants.

“There has long been a lack of clarity about the direction of Germany’s energy policy,” chief executive Johannes Teyssen said. “This needs to change.”

DPA/The Local/AFP/arp

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