The European Commission said on June 18 that it had unconditionally approved under the EU Merger Regulation the acquisition of Uniper by Fortum. Both companies are active in the energy sector.
According to the Commission, the investigation found that the transaction is unlikely to hinder effective competition in the generation and supply of electricity given, in particular, the combined moderate market share of the parties in Sweden (around 30%), the high level of interconnectivity with neighbouring countries, the significant spare capacity available in Sweden and the likely reaction of other producers to any price increases by the merged entity.
The Commission added that, according to the investigation, the transaction will not increase the risk of coordination in the generation and wholesale of electricity in Sweden, for example, due to the complexity of such a strategy.
Moreover, the transaction is unlikely to lead to distortions of competition with regard to ancillary services in Sweden, in particular because of the available spare capacity and/or possible third-party expansion, the possibility of importing electricity and the fact that the grid operator is actively increasing the potential for new suppliers to participate in these markets.
The Commission said that the investigation found that the transaction would not materially decrease the liquidity of the financial electricity market in the Nordic countries or to raise trading prices.
Therefore, the Commission said the EC concluded that the transaction would raise no competition concerns in any of the affected markets.
Competition Policy Commissioner Margrethe Vestager stressed that ensuring competition in European power markets is essential since electricity is a good that everyone uses.
“Fortum and Uniper are important players in the generation of electricity in the Nordic countries, in particular in Sweden. We can approve their proposed merger, in particular, because of the high level of interconnectivity between different countries in the Nordic area and because there is significant spare generation capacity in Sweden. As a result, we found that competition will remain strong after the merger,” Vestager said.