Germany's largest utility firm E.ON SE said it planned to commit itself to renewable energy and spin off its fossil fuel and nuclear power production as a separate company.
The move reflects the Germany government's decision to abandon nuclear power as a reaction to the 2011 earthquake and tsunami event that devastated the Fukushima Daiichi plant in northeastern Japan.
Germany's economy minister, Sigmar Gabriel quickly endorsed the decision, which was announced Sunday. E.ON shares jumped 4.2 percent Monday on Germany's stock exchange.
The Wall Street Journal said the spin off would include unprofitable businesses in Russia and Brazil, but that E.ON denied it was simply isolating its unprofitable operations.
Profits have been compromised by a weak ruble in Russia. In Brazil, E.ON's troubles revolved around the misfortunes of billionaire Eike Batista, who reportedly lost more than $34 billion in mining and oil and gas exploration. Batista was E.ON's partner in the country.
E.ON also said it would sell off its assets in Spain and Portugal. Its North Sea and Italian assets are under review, the Journal said.
Chancellor Angela Merkel's 2011 endorsement of the “Energiewende” energy policy pulled the rug out from under E.ON's traditional production operations already made vulnerable by weak demand as a result of prolonged recession in the European Union.
E.ON said two thirds of its 60,000 employees would remain with the parent company. The remaining 20,000 would be assigned to the new company, which has yet to be named.
Analysts have speculated that the move could be followed by similar spinoffs by other European utility companies. Regarding E.ON, “you want to own the yin, but probably not the yang company,” The Wall Street Journal quoted one market analyst as saying.