EU approves Italian retail gas joint venture between A2A and Gazprom

The European Commission has cleared under the EU Merger Regulation an Italian gas retail supply company between A2A Spa of Italy and Gazprom Germania GmbH, a subsidiary of Gazprom.

After examining the operation, the Commission concluded that the transaction would not significantly impede effective competition in the European Economic Area (EEA) or any substantial part of it.

The joint venture called PremiumGas is primarily active in the retail supply of gas in Italy. A2A produces, sells and distributes electricity and gas also in Italy. It also supplies heating services, water and waste management in Italy. Gazprom Germania is a subsidiary of Russian State-controlled company Gazprom active in the production, storage and sale of natural gas. Gazprom is active in the exploration, production, transportation, refining and marketing of natural gas and petrochemical products.

The Commission’s examination of the proposed transaction showed that the horizontal overlap between the activities of A2A and PremiumGas in the retail supply of gas in Italy is limited and that the merged entity will continue to face effective competition from other companies.

The Commission also investigated the vertical relationship resulting from the joint venture, between the upstream market of wholesale of natural gas and the downstream market of retail gas supply in Italy. It concluded that the proposed transaction would not close off the market to competition, given that a sufficient number of competitors would remain and due to the low market shares in the downstream markets. Consequently, the transaction does not give rise to competition concerns.

The transaction was notified to the Commission on 7 May 2010.