RWE AG plans to sell about 8 billion euros ($11 billion) of assets, starting with its German power network, as the country’s second-largest utility cuts debt, according to two people with knowledge of the matter.
E.ON AG and RWE AG , two of the worst performers in Germany’s benchmark DAX share index this year, are poised to cut dividends and investment because a proposed tax on nuclear reactors will erode the utilities’ profits.
E.ON AG, the German utility that bought French, Spanish and Italian power plants in 2008, said it took a 2.6 billion-euro ($3.6 billion) charge to reflect lower asset values as electricity demand trails expectations.
RWE AG , Germany’s second-largest utility, said profit will fall about 30 percent this year because of a tax on its nuclear reactors and “stagnating” power prices. The shares fell the most in 10 months.
German utilities E.ON AG and RWE AG, two of the worst-performing members of the benchmark DAX index, face a triple whammy of costs tied to a reprieve for nuclear power of as little as 10 years, Chancellor Angela Merkel said.
German Chancellor Angela Merkel ’s Cabinet backed a draft law that paves the way for utilities to pump greenhouse gases underground, a move aimed at helping the government to switch its energy policy away from nuclear power.