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UPDATE 2-E.ON set to win EU antitrust permission for Innogy deal -sources

Foo Yun Chee

(Adds European Commission, Innogy decline comment, details)

BRUSSELS, July 12 (Reuters) - E.ON is expected to win EU antitrust approval to buy rival Innogy's network and retail assets, sources said on Friday, in a deal set to transform the German company into a major player in the European energy market.

The green light from the European Commission is set to come after E.ON sweetened its concessions to address competition concerns, the sources, who are familiar with the matter, said.

The deal, which will mark the biggest overhaul of the German power industry since the country sped up its exit from nuclear energy, is part of a bigger asset swap with Innogy's parent RWE and will more than double E.ON's customers in Germany to nearly 14 million.

E.ON last month offered to sell part of its retail business in Hungary as well as Innogy's retail power and gas business in the Czech Republic with 1.6 million customers, after the European Commission voiced concerns that the deal may reduce competition.

The offer also included dropping 260,000 heating customers in Germany, as well as the right to operate 32 charging stations for electric cars along Germany's Autobahn motorway network.

E.ON subsequently improved its proposal for all three countries after the European Commission received feedback from rivals and customers, one of the sources said.

The EU competition enforcer did not seek comments about the tweaks, an indication that it was likely to accept them, the source said, without providing details.

The Commission, which is scheduled to decide on the deal by Sept. 20, and Innogy declined to comment.

E.ON said: "We continue to be confident to be able to close the transaction within the second half of 2019."

The deal has drawn criticism from E.ON's rivals in Germany which have demanded more concessions to counter the market power it would have after acquiring Innogy's assets. (Reporting by Foo Yun Chee, additional reporting by Vera Eckert in Frankfurt; editing by Francesco Guarascio and Kirsten Donovan)