The agreement foresees Eon acquiring the entire 76.8% stake in Innogy from RWE.
German utility company E.ON is now in control of the renewable energy segment created by its rival, RWE, in a landmark, multi-billion dollar deal, they said.
The logo of German energy company Innogy at its headquarters in Essen.
Should the prospective deal go ahead - the acquisition still needs to be approved by European Union regulators and the companies' respective boards - it would represent a significant shift for both organisations and the German energy sector more generally.
Under the deal still subject to approval by anti-trust authorities, RWE would receive the Innogy renewables and gas storage business as well as Innogy's stake in Austrian energy supplier Kelag.
"Through the renewable pipeline, RWE, too, should be able to offset its dwindling nuclear and lignite business as well as attract partners for the expansion of its wind business".
However, Innogy, which reported its annual results on Monday, said that it had so far not reflected on the proposal and would comment at a later stage. EON would also transfer to RWE most of its renewables business and the minority interests held by its subsidiary PreussenElektra in two RWE-operated nuclear power plants. The company, in turmoil since former Chief Executive Peter Terium resigned in December, on Monday announced plans to cut 400 million euros in costs through the end of 2020. Through this transaction E.ON would become a focused customer-oriented energy company concentrating on energy networks and customer solutions.
Innogy reported a 3 percent rise in 2017 adjusted operating profit and said it would propose a dividend of 1.60 euros per share for 2017, unchanged from a year earlier.
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