The EC is concerned that the acquisition may increase prices for consumers in four key European markets.
The EC launched an in-depth investigation into E.ON’s proposed acquisition of Innogy from RWE (see news of February 21, 2019: “RWE to win EU regulatory approval to buy E.ON and Innogy’s renewables businesses”) due to concerns that the acquisition could decrease competition and lead to an increase in gas and electricity prices for consumers in key European markets. The EC’s initial investigation showed that RWE and E.ON maintain a strong combined market position in several retail markets in Germany, the Czech Republic, Slovakia and Hungary.
The two parties committed to a complex two step asset swap, involving RWE buying E.ON’s renewable and nuclear assets (which was approved by the EC), and E.ON acquiring the distribution and consumer solutions businesses and certain generation assets from RWE’s subsidiary Innogy. Following the asset swap, E.ON will focus on the distribution and retail supply of gas and electricity while RWE will primarily operate in upstream electricity generation and wholesale markets.
The EC has until 23 July 2019 to make a decision.