Germany’s E.ON took a step closer on 17 September in acquiring Innogy’s distribution and consumer solutions business as well as certain of its electricity generation assets after the European Commission gave its approval but the EU’s completion chief stressed the decision is conditional to full compliance with a commitments package offered by E.ON.
Competition Policy Commissioner Margrethe Vestager said it is important that all Europeans and businesses can buy electricity and gas at competitive prices. “Today, we can approve the acquisition of Innogy by E.ON because the commitments offered by E.ON will ensure that the merger will not lead to less choice and higher prices in the countries where these companies operate,” she said.
E.ON and RWE, which controls Innogy, are both energy companies based in Germany. They are active across the energy supply chain, from generation and wholesale to distribution and retail supply of electricity and gas.
According to the Commission, E.ON and RWE are each active in several EU countries but their activities mostly overlap in the Czech Republic, Germany, Hungary, Slovakia and the UK.
The Commission said on 17 September the decision follows an in-depth investigation of E.ON’s proposed acquisition of Innogy’s distribution and consumer solutions business as well as certain electricity generation assets of Innogy. During its in-depth investigation the Commission had concerns that the transaction, as initially notified, would have significantly reduced competition in the German market for the supply of electricity for heating purposes, the German market for the supply of electric vehicle charging stations on motorways, the Czech market for the retail supply of gas to all customers and electricity to households and small businesses, and the Hungarian market for the retail supply of electricity to unregulated businesses.
To address the Commission’s competition concerns, E.ON offered to divest most of E.ON’s customers supplied with heating electricity in Germany and, at the option of the purchaser, all assets that may be needed to operate effectively in the market, to discontinue the operation of 34 electric charging stations located on German motorways, to divest E.ON’s business in the retail supply of electricity to unregulated customers in Hungary, including all assets and staff, and to divest Innogy’s entire business in the retail supply of electricity and gas in the Czech Republic, including all assets and staff.
The Commission said the transaction, as modified by the commitments, would no longer raise competition concerns but this decision is conditional upon the full compliance with the commitments.