(Bloomberg) -- German utility RWE AG agreed to buy Consolidated Edison Inc.'s renewable energy assets for $6.8 billion, in one of the biggest green deals in US history.
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The deal will almost double RWE's renewables portfolio in the US to more than 7 gigawatts, the company said in a statement. The financing will initially be provided by a bridge loan, which will be partly refinanced by a convertible bond to a subsidiary of Qatar Investment Authority with an aggregate principal amount of 2.43 billion euros ($2.38 billion).
The deal "is a major boost for RWE's green expansion in the US, one of the most attractive and fastest growing markets for renewable energy," Chief Executive Officer Markus Krebber said in a statement.
RWE has been benefiting from the market turmoil in Europe's power and gas markets since Russia waged war on Ukraine. The German utility raised its earnings outlook for the year to reflect expectations 30% higher than a previous forecast. The company had earmarked up to 15 billion euros for investment in the US as part of its Growing Green strategy, which envisages global investment of 50 billion euros by 2030.
Con Edison, which supplies electric service in New York, parts of New Jersey, and Pennsylvania as well as to wholesale customers, has a market value of about $30.4 billion. The company announced in February it was exploring strategic alternatives for the clean-power business.
In a separate statement, Con Edison said it intends to forego a previously announced plan to issue up to $850 million of common equity this year and withdraw its equity guidance for 2023 and 2024.
"The transaction we announced today will allow Con Edison to sharply focus on our core utility businesses and the investments needed to lead New York's ambitious clean energy transition," Con Edison CEO Timothy Cawley said.
Barclays was the financial adviser to Con Edison, while Latham & Watkins LLP was its legal adviser.
(Updates with Con Edison statement, advisers starting from sixth paragraph)
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