The European Commission has cleared under the EU Merger Regulation the acquisition of NWR Energy by Dalkia Ceská republika, two Czech companies active in the energy sector.
The Commission concluded that the proposed transaction would not significantly impede effective competition in the European Economic Area (EEA) or any substantial part of it.
Dalkia CZ is primarily involved in the provision of district heat to end customers in several Czech municipalities as well as in the generation, wholesale, trading and retail supply of electricity, the provision of ancillary services, the maintenance and repair of technology equipment in the energy sector and the trading of CO2 emission rights.
NWR Energy is primarily active in the provision of district heat, distribution, trading and retail supply of electricity, trading in CO2 emission rights in the Czech Republic and hard coal mining in the Czech Republic and Poland.
The proposed transaction gives rise to a number of vertical relationships between the parties. The market for the supply of district heat is affected in relation to the market for the trading of CO2 emissions rights and the market for maintenance and repair of technology equipment in the energy sector. In addition, the market for distribution of electricity is vertically affected in relation to the markets of generation and wholesale supply of electricity, maintenance and repair of technology equipment in the energy sector and retail supply of electricity. Furthermore, if the retail supply of electricity at local distribution network level is considered as a separate market, it would be vertically affected in relation to the markets of generation and wholesale supply of electricity and the market for distribution of electricity in Prague and Roztoky, near Prague.
However, the Commission’s investigation found 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 related upstream/downstream markets. The proposed transaction was notified to the Commission for regulatory clearance in the European Economic Area on 8 April 2010.
