E.ON plans to shut down 3 German units

FRANKFURT: E.ON plans to shut three of its businesses in Germany, affecting hundreds of jobs, to cut costs and cope with the effects of the country's nuclear phase-out, weekly magazine Der Spiegel said.

Management has decided to close the E.ON Energie unit in Munich, power plant unit E.ON Kraftwerke in Hanover and gas unit E.ON Ruhrgas in Essen, the magazine said, citing no sources.

Similar steps are to be taken at E.ON units outside Germany, it said. It said the plan was to be presented to the supervisory board next week.

"As a consequence of considerably changed business conditions, E.ON is currently examining a possible adjustment of its strategy," E.ON said in a statement in response to the article, adding no decisions had been made yet.

The German government shut down seven nuclear power plants immediately and permanently after the Fukushima nuclear disaster and decided to phase out nuclear power completely by 2022, overturning legislation that had originally extended the lifespan of the country's 17 nuclear power plants by decades.

Germany's post-nuclear future means the country's four big utilities E.ON, RWE, EnBW, and Vattenfall will have to produce electricity at a higher cost while wholesale prices could falter due to slow economic growth, stagnating populations and rising energy efficiency.

EnBW said on Friday it was considering a capital increase, more cost cuts and a faster sale of assets to shore up cash as the nuclear phase-out hits profit.

RWE has also said a capital increase, merger with a peer and more divestments were among its options to keep rating agencies from downgrading its debt further.

E.ON is due to publish first-half financial results on Aug. 10.

Copyright Reuters, 2011