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Bruxelles, 8 February 2000

Commission authorises the acquisition by Electrabel (Belgium) of the Dutch electricity producer EPON

The European Commission has approved the take-over by Electrabel SA (Belgium) of the Dutch company N.V. Elektriciteits-Produktiemaatschappij Oost- en Noord-Nederland (EPON). Electrabel is controlled by the undertaking Suez Lyonnaise des Eaux (via its subsidiary Tractebel), and its activities are in the production and transport of electricity and natural gas, as well as in other markets such as the distribution of TV and radio signals via cable and the generation and distribution of heating. Electrabel is mainly active in Belgium. EPON is foremost active in the Netherlands in the generation and distribution of electricity. It also has ancillary activities in heating and in the construction and maintenance of industrial installations and in engineering services. In addition, both companies are active on the market for spot trading in electricity through their shareholding of the Amsterdam Power Exchange (APX).

More specifically, the activities of the companies involved overlap in the areas of the generation and distribution of electricity, the generation and distribution of heating, the provision of engineering services and services relating to the management and maintenance of industrial installations. Also, an overlap of activities occurs in terms of the shareholding at the APX. Both parties are active at the Amsterdam Power Exchange for spot trading, but EPON's interest will be sold following the merger. The Commission has found that on none of these markets the merger would substantially affect competition.

Regarding the electricity sector, in spite of the existence of legislation aimed at the progressive liberalisation of the electricity markets in Europe, the Commission has considered, in line with previous cases, that the Dutch and Belgian markets are at most national in size, in view of the different legal regimes, different prices and technical impediments which continue to restrict imports and exports.

Given the absence from each other's markets, there is no addition of market shares for the production of electricity. Regarding the downstream market of the distribution of electricity to so-called 'eligible' customers, Electrabel has only a marginal share (of less than 0.5%) in the Netherlands, which it will not be able to increase significantly in the near or medium future and EPON is not present on the Belgian market. EPON is currently restricted in its commercial freedom by the so-called Protocol Agreement (valid until 1 January 2001), on the basis of which it has an obligation to deliver exclusively to particular distributors in the Netherlands. Before that date it will in any event not be able to enter the Belgian market and even for the period after 2001 its entry cannot be foreseen. The merger will therefore not lead to the exclusion of a potential competitor on the Belgian market.

Regarding the APX, statutorily no participant may have a shareholding of more than 10%, and therefore Electrabel will dispose of the share of EPON once the transaction is completed. Furthermore, it is not expected that the share of Electrabel of the trading volume at the APX would increase to very high levels once it can dispose freely of the production volume of EPON, given that on the APX a number of large international energy companies are present.

As for the market for the generation and distribution of heating, EPON is only active locally in the Netherlands and the merger will not lead to any competitive overlap between Electrabel and EPON. Regarding the provision of engineering services and services relating to the management and maintenance of industrial installations, the merger will not lead to the combination of significant market shares on a world-wide, European or national level.

For these reasons, the Commission has decided not to oppose the merger and to declare it compatible with the functioning of the common market

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