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IP/00/1099

Brussels, 2 Octobre 2000

Commission opens in-depth investigation into the joint control of EnBW by EDF and OEW

The European Commission has decided to undertake a full, second phase investigation of the proposed transaction by which Electricité de France (EdF) and Zweckverband Oberschwäbische Elektrizitätswerke (OEW), Germany, acquire joint control over Energie Baden-Württemberg (EnBW). The Commission considers that the proposed joint-venture raises serious doubts, as it would remove a potential competitor to EdF on the French electricity market.

EDF is a wholly state-owned company whose principal activities are generation, transmission, distribution, and supply of electricity in France. It is the operator of the national transport grid. EDF has shareholdings in electricity companies in many European countries Austria, Belgium, Italy, Luxembourg, Netherlands, Portugal, Spain, Sweden, Switzerland and the United Kingdom. Outside of France, EDF is also active in electricity trading through EDF Trading Ltd., which is jointly controlled by EDF and S.A. Louis-Dreyfus & Cie. Furthermore, EDF is active in the construction, operation, and maintenance of electrical plants and power networks and provides waste recycling and street lightening services.

OEW is an association of nine public districts in the Southwest of Germany. Its main purpose is to hold shares in companies active in the energy sectors.

EnBW is a vertically integrated electricity utility active in electricity generation, transmission, distribution, and supply of electricity mainly in the Southwest of Germany. Furthermore, EnBW has activities in electricity trading. Other business activities comprise the supply of gas and district heating, telecommunication, waste recycling and financial services.

On the basis of the information available to date, the merger's primary effects will be felt on the French market. EdF is by far the largest electricity generator in France. The company has a monopoly in supplying final customers with electricity. According to the French electricity laws, which took effect in the year 2000 as a result of the implementation of the Electricity Directive aiming to liberalise the European electricity markets, industrial customers with consumption in excess of 16 GWh/year (per site) have the choice of their electricity supplier. EnBW, which has its supply area along the French-German border, can be considered as potential entrant into the French electricity market approaching eligible customers. The Commission accordingly has serious doubts about the operation's compatibility with the common market, in as much as the transaction could lead to the elimination of a potential competitor entering the French market. The Commission's enquiries also gave grounds for concern on further closure effects of the French market that could be exercised by commonly-held participations of EdF and EnBW in Swiss electricity operators which could enter the French market.

The Commission has accordingly decided to undertake a full investigation of the case. It has a further four months from the date of that decision in which to make a final decision.


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