Chief executive Peter Terium resigned late previous year in the wake of a profit warning leaving Uwe Tigges as interim CEO.
The complex transaction planned in various steps would still need the approval of both companies supervisory boards as well as various regulatory approvals, the statement said.
Shares in Innogy were up 13.8 percent to 39.28 euros at 1025 GMT after Sunday's proposed deal from RWE and E.ON, which plans to offer Innogy's minority shareholders 40 euros per share, or 5.2 billion euros, a 16 percent premium to Friday's close.
Both companies have had to rethink their business models in recent years, with German Chancellor Angela Merkel championing the pursuit of a low-carbon economy through Germany's "Energiewende" policy. The deal is expected to involve German and European antitrust regulators.
"After successful implementation of the transaction it is meant to fully integrate innogy into the E.ON Group", E.ON said in a statement. In the second stage, RWE will take over E.On's renewables business, .
Eon will receive RWE's 76.8% stake in Innogy.
RWE said its plan is to combine the renewables businesses of Innogy and E.on to establish a greener utility with a broadly diversified portfolio of renewable and conventional power generation assets, which would be linked via its existing trading business.
If approved, the deal would spell the end for Innogy as a standalone company.
It would leave E.ON operating primarily as an energy networks and retail specialist, with RWE significantly strengthening its position in the renewables and clean energy generation markets.
Innogy, in turmoil since former Chief Executive Peter Terium resigned in December, on Monday said controllable costs would be slashed by about 400 million euros ($499 million) through the end of 2020.