German Cartel Office Clears Evonik Steag Acquisition

The German Cartel Office has cleared the sale of a 51% stake in the Essen-based Evonik Steag GmbH to a holding company of seven municipal utilities located in North Rhine-Westphalia (Kommunale Beteiligungsgesellschaft GmbH). The Office also stopped antitrust proceedings against Evonik Industries AG and RWE AG relating to electricity contract clauses suspected to restrict competition.

The involvement of the municipal utilities may help to establish Steag as an independent player on the German market alongside the four major utilities (E.ON AG, RWE AG, EnBW AG, Vattenfall Europe), Andreas Mundt, president of the German Cartel Office commented in a press release. In a recent electricity sector inquiry, the office found no evidence of an abuse of market power by the four utilities, but said they still held an 80% share of the first-time sales market.

Following the sector inquiry, the office had also initiated antitrust proceedings against Evonik Steag GmbH’s parent company Evonik Industries AG and RWE AG relating to electricity contract clauses suspected to restrict competition. In the clauses in question Evonik had committed itself to reserve power plant output in the order of 1,500 MW for RWE.

In terms of antitrust law, the German Cartel Office reviewed the fact that Evonik had to refund RWE AG in the case it wanted to sell the electricity to third parties. The amount of the refund rendered third party sales unattractive, the office said. During the ensuing  proceedings Evonik and RWE declared to disregard the respective clauses. In addition RWE announced not to extend the option to purchase electricity from Evonik power plants in Saarland and the Ruhr area beyond the year 2012. As substantial amounts of electricity can now be sold to third parties, the German Cartel Office stopped its proceedings.

Source: German Cartel Office

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