Germany's largest power producer RWE AG said on Saturday it had agreed to buy Con Edison Inc's Clean Energy Businesses subsidiary for $6.8 billion, doubling down on the world's second-biggest renewables market.

RWE is one of Germany's main energy providers, with production historically linked to coal, which placed it among the country's largest CO2 polluters. The group has accelerated its diversification into renewables in recent years.

Currently at 3 percent, following the takeover solar will account for 40 percent of RWE's U.S. portfolio, according to presentation slides.

The transaction, which is expected to close in the first half of 2023, will make RWE the fourth-largest renewables player in the U.S. market.

Marcus Krebber, the German firm's CEO, said the deal was a "major boost" for RWE's green energy expansion.

RWE is targeting carbon neutrality by 2040.

The deal, RWE's biggest since the breakup of former division Innogy, announced in 2018, will be earnings accretive right away, giving RWE additional core earnings of $600 million a year.

(With input from Reuters, AFP)