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EU approves acquisition of Mitgas by RWE of Germany

The European Commission has cleared under the EU Merger Regulation the acquisition of Mitgas (Germany) by enviaM (Germany), which is wholly controlled by RWE of Germany.

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.

Mitgas is a regional gas distributor in Eastern Germany and mainly active in the wholesale supply of high calorific gas to local energy suppliers (“Stadtwerke”) and in the retail supply of such gas to end-customers. enviaM and its subsidiaries are mainly active in the transmission and retail of electricity, heat and related services to local distributors and end-customers as well as in water supply in the German Länder of Saxony and Saxony-Anhalt as well as parts of Thuringia and Brandenburg. enviaM holds shares in a number of Stadtwerke. enviaM’s mother company RWE is primarily active in electricity and natural gas at essentially every level of the supply chain, ranging from exploration/generation to the supply of end-customers. RWE is active across the European Union.

The transaction was implemented on 28 August 2009. The Commission asked RWE to retroactively notify the proposed transaction.

The Commission examined the effects of the acquisition in particular as regards wholesale and retail supply of gas in the relevant grid areas. The Commission's investigation found that overlaps of the parties’ activities are either limited or are set to diminish and to eventually disappear as RWE had already decided pre-merger to stop its gas activities in the areas where Mitgas is active. For these reasons, the transaction does not give rise to competition concerns.

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