Merger of ENSO and DREWAG formally approved

Sachsen Energie AG to become Germany’s fourth-largest municipal utility

Dresden (energate) – The merger of ENSO and DREWAG, two Dresden-based utilities, into Sachsen Energie AG has received final approval. With a 99.8% majority, the ENSO general assembly has now also voted in favor of what has been described as a “merger of equals.” This marks the formal conclusion of the process and paves the way for the formation of Germany’s fourth-largest municipally owned utility. According to a DREWAG spokesperson, the next step will be the formal registration of Sachsen Energie AG in the commercial register.

The decision by ENSO’s shareholders follows a three-year integration process, during which both companies had already collaborated operationally in several areas since 2018. In the weeks leading up to the final vote, the Dresden city council and the supervisory boards of both companies had already approved the merger. “We’ve reached our goal. With Sachsen Energie, we are creating a company deeply rooted in the region,” said Frank Brinkmann, CEO of ENSO, Managing Director of DREWAG, and designated CEO of Sachsen Energie.

From January 2021, Sachsen Energie will operate with 168 municipal shareholders, 3,300 employees, and annual revenues of €2.8 billion, making it the largest regional municipal utility in Eastern Germany. Its service area spans the city of Dresden and the surrounding districts of Meißen, Sächsische Schweiz-Osterzgebirge, Bautzen, and Görlitz. The majority shareholder is the City of Dresden, holding 82.3% of shares through its energy holding EVD. The KBO, a consortium representing 148 additional municipalities, holds 16.3%, while individual municipalities hold the remaining 1.4%.

Streamlined administration, but no large-scale layoffs
The integration is expected to be completed during the first half of 2021. According to DREWAG, no significant job reductions are planned: “Some administrative duplications will be phased out in a socially responsible way. At the same time, new roles will be created in high-growth areas such as fiber-optics and broadband,” a spokesperson noted. The merger aims to maintain a balance of equals, with all established brands to remain in place. The two existing grid operators will continue to operate separately, though their responsibilities will no longer be defined geographically, but rather by voltage levels (electricity) and pressure stages (gas). The existing local tax distribution model among shareholders will remain unchanged.

€30 million synergy potential | Strategic growth in renewables and infrastructure
The merged entity aims to increase competitiveness and operational efficiency, with expected synergies of approximately €30 million. ENSO’s full inclusion in DREWAG’s tax group structure — especially relevant for public transport entities impacted by COVID-19 — is expected to enhance group performance beyond the capabilities of either standalone company. Looking ahead, Sachsen Energie plans to pay €14 million in annual dividends over the next 10 years to its shareholders. Strategically, the company will focus on Expansion of renewable energy generation, Decarbonization of district heating systems, Deployment of 1,000 EV charging points by 2025, Significant investments in broadband infrastructure. These initiatives are designed to position Sachsen Energie as a strong regional competitor — capable of holding its ground against national players such as E.ON.

Source: energate messenger+