Brussels, 16/05/2000 (Agence Europe) - On Tuesday, the European Commission said that it had received further undertakings from the companies Veba and Viag in the context of its in-depth investigation on the effect of the merger of the two German consortiums on the electricity and chemicals markets. According to Veba representatives, these undertakings respond to the Commission's concerns and would enable the two companies to secure the Commission's green light on 7 June.
In a statement of objections addressed to the two firms in April, the Commission considered that the merger risked creating a duopoly on the German markets for the production and distribution of electricity between Veba and Viag ad RWE and VEW (see EUROPE of 15 April, p.13). According to the German anti-trust authorities, Veba/Viag and RWE/VEW represent 80% of German electricity production capabilities, 70% of the market for large customers and 55% of the market for individuals. The Commission feared that the share out of the territory between the two companies should seal the market and increase fees for the transit of electricity to other Member States. Without any undertakings by the companies, the merger "threatened" cross-border trade in electricity and would be contrary to the opening up of the market at European level", the Commissioner for competition, Mario Monti, declared.
At the same time the German cartels office is investigating the merger between RWE and VEW, rivals of Vega/Viag and number three in Europe, behind France's EDF and Italy's Enel. The German's cartels office should decide on the case of RWE/VEW at the same time as the Commission. With an accumulated turnover of 76 billion euro and 200,000 employees, the Veba/Viag merger would create Germany's third largest industrial group (called E. On) essentially present on the energy market (through PreussenElektra, subsidiary of Veba and Bayernwerk, subsidiary of Viga) and chemicals (through Degussa-Huls and SKW Trostberg).