Brussels, 13/06/2000 (Agence Europe) - The European Commission authorised, subject to conditions, the merger between the German groups PreussenElektra (VEBA) and Bayernwerk (VIAG). The German Bundeskartellamt should soon approve, under the same conditions, the merger between RWE and VEW, competitors of VEBA/VIAG. The Commission and the German anti-trust feared the formation of a duopoly between the two merged groups, which would both have controlled 80% of the German market in electricity delivered from the interconnected grid. This dominant position would have annihilated the effects of the liberalisation of the electricity market in Europe, felt the European competition services.
The two anti-trust authorities authorise the mergers, on condition that the two groups cede their direct and indirect stakes in the German electricity company, Vereinigte Energiewerke (VEAG), and undertake to buy electricity from VEAG for 7 years. Thus VEAG becomes an independent company, the third largest on the German market, behind RWE/VEW and VEBA/VIAG.
The merged groups also undertook to renounce collecting a tax on deliveries of energy between the north and south zones of Germany that are not compensated by the delivery in the other direction ("composant T" tax). Furthermore, VEBA must free a share of the capacity reserved to interconnections with Denmark, so as to facilitate the imports from Scandinavia. The European Commission also called for concessions from VEBA/VIAG in the chemicals sector.
The Competition Commissioner, Mario Monti, announced: the undertakings guaranteeing that a large number of the links connecting the German electricity distributors will be removed. Thus there will be a permanent incentive to competition between these companies and German consumers will be sure of benefiting, in the long-term of favourable prices for electricity. All this has been possible thanks to the excellent collaboration with the Budeskartellamt."
The Commissioner responsible for the European energy market, Loyola de Palacio, expressed some doubts on the true effects on the severing of ties of VEBA and VIAG in VEAG as well as on access to the German network. Though in this framework the Commission spoke exclusively on the effects of the merger and not on the organisation of the market.
The Bundeskartellamt must still examine the "gas" aspect of the REW/VEW merger before approving the operation.