* Npower's industrial, commercial customers to be carved out
* Restructuring to result in 4,500 job losses - British
union
* Talks with unions over restructuring have started-E.ON CEO
(Adds details, shares)
By Christoph Steitz and Tom Käckenhoff
FRANKFURT/DUESSELDORF, Germany, Nov 29 (Reuters) - German
energy group E.ON plans a 500-million-pound ($642
million) break-up of the struggling British Npower division it
inherited from Innogy, which an union said could put up
to 4,500 jobs at risk.
The revamp is the latest among established British retail
power providers, which have been losing customers to nimbler
recent market entrants and been hit by a regulatory price cap.
E.ON's plan includes managing Npower's residential and small
and medium-size business customers on the same platform as its
own, while putting Npower's industrial and commercial customers
into a separate business. The rest of Npower will be closed.
The shake-up will result in 4,500 job losses at Npower,
British union UNISON said, which would be nearly 80% of the
division's total staff.
"The UK market is currently particularly challenging. We've
emphasised repeatedly that we'll take all necessary action to
return our business there to consistent profitability," E.ON CEO
Johannes Teyssen said in a statement.
At 0815 GMT, E.ON shares were up 2.2%.
Teyssen said talks with British unions about the plans had
already started.
Npower, one of Britain's "Big Six" energy providers, has
been suffering more than rivals, including E.ON itself,
Centrica's, SSE, EDF and Iberdrola
, partly because of internal billing problems.
E.ON said it expected its combined British business to
achieve at least 100 million pounds of earnings before interest
and tax (EBIT) and positive free cash flow after smart meter
investments from 2022 onwards.
E.ON took over Npower as part of a far-reaching asset swap
with RWE that included the break up of Innogy. The
deal, first announced in March 2018, has turned E.ON into a pure
energy retail and networks group.
As a result of the transaction, E.ON's net debt nearly
doubled to 39.6 billion euros ($43.7 billion) at the end of
September.
E.ON also said on Friday the deal had led it to raise its
2019 adjusted EBIT forecast to 3.1-3.3 billion euros from
2.9-3.1 billion. In the first nine months of the year, adjusted
EBIT fell 6% at 2.2 billion euros.
($1 = 0.7794 pounds)
($1 = 0.9073 euros)
(Editing by Jason Neely and Mark Potter)