E.ON has reorganised its business to focus on renewables, energy networks and customer solutions.
Germany’s energy giant has separated its hydro, natural gas and coal plants as well as global energy trading operations in a separate company named Uniper.
It will operate independently and aims to ensure security of energy supply, said E.ON.
The company made the decision as a response “to the distinctly different challenges of the new and conventional energy worlds”.
Shareholders will meet in June to approve the spin-off when E.ON plans to divest a majority stake in Uniper.
Uniper CEO Klaus Schäfer said: “Economic prosperity is and will continue to be fuelled by energy. The global population is growing and so is its consumption of energy, which people take for granted. Ensuring that people have a secure and cost-effective supply of power and gas will remain a crucial task.”