The European Commission has approved RWE’s acquisition of E.On’s renewable and nuclear electricity generation assets. The Commission concluded that the transaction would raise no competition concerns in the European Economic Area. But in the UK the Competition and Markets Authority has opened an investigation into the asset swap between the two companies. The CMA wants comments on the deal by 13 March and will decide whether to conduct a deeper investigation by 26 April.
In the asset swap, RWE will acquire most of E.On’s renewable and nuclear generation assets. In exchange, RWE will receive a 16.67% stake in E.On. Following the asset swap, RWE will be primarily active in upstream electricity generation and wholesale markets, while E.On will focus on the distribution and retail of electricity and gas. The
The European Commission investigation focused on the generation and wholesale supply of electricity in Germany, saying it was the main country where the activities of RWE and E.On’s electricity generation assets overlap. It said the swap would not hinder effective competition, because it would add only 1% to RWE’s 20% market share (30% in conventional power generation). It was also unlikely to affect RWE’s ability and incentives to influence market prices through withholding electricity supply.