Background
Proposed take-over by the Belgian company Electrabel of the Dutch company Epon. Electrabel is controlled by the undertaking Suez-Lyonnaise des Eaux, and its activities are in the production and transport of electricity and natural gas, as well as in other markets, such as distribution of TV and radio signals via cable and the generation and distribution of heating. Electrabel is mainly active in Belgium. Epon is active in the Netherlands in the generation and distribution of electricity. It has ancillary activities in heating and in the construction and maintenance of industrial installation and in engineering services. Both companies are also active on the market for spot trading in electricity on, and are shareholders of, the Amsterdam Power Exchange (APX).
Assessment
The Commission approved the operation. The activities of the companies overlap in the areas of the generation and distribution of electricity, generation and distribution of heating, provision of engineering services and services relating to the management and maintenance of industrial installation. There is also an overlap in terms of the shareholding at the APX, although Epon’s interest will be sold following the merger. The Commission decided that on none of these markets would the merger substantially affect competition.
As for the electricity sector, in spite of the progressive liberalisation of the market, the Commission considered that the Dutch and Belgian markets are at most national in size, in view of the different legal regimes, different prices and technical impediments which continue to restrict imports and exports. Given their absence from each other’s markets, there is no addition of market shares for the production of electricity. With regard to the downstream market for the distribution of electricity to eligible customers, Electrabel has only a marginal share (less than 0.5%) in the Netherlands, which it will not be able to increase significantly, and Epon is not present in Belgium. Until 1 January 2001, Epon is restricted in its commercial freedom by a Protocol Agreement, on the basis of which it has an obligation to deliver exclusively to particular distributors in the Netherlands. Therefore, according to the Commission, the merger will not lead to the exclusion of a potential competitor on the Belgian market.
As far as the APX is concerned, its statute prevents any participant having a shareholding of more than 10% and therefore Electrabel will dispose of Epon’s share once the transaction is completed. Further, a number of large international energy companies are present on the APX. In relation to the market for the generation and distribution of heating, Epon is only active locally in the Netherlands and the merger will not lead to any competitive overlap between the parties. For the provision of engineering services and services relating to the management and maintenance of industrial installations, the merger will not lead to the combination of significant market shares at a world-wide, European or national level. For the above reasons, the Commission has decided to clear the operation (Case n° COMP/M.1803, decision of 7 February 2000).
