Brussels, 23 December 2002
Acquisition of Enel's power unit, Interpower, by Electrabel and Energia falls outside Merger Regulation
The European Commission has decided that the proposed joint acquisition of Interpower S.p.A. by Electrabel S.A. and Italy's Energia S.p.A. cannot be considered a concentration and, therefore, does not need to be assessed under the European Union's Merger Regulation.
Under a deal notified to the Commission under the Merger Regulation on 26 November, Electrabel and Energia are buying Italian power generator Interpower from Enel of Italy.
The operation consists of a joint venture agreement under which Interpower will sell the electricity it produces mostly to Electrabel and Energia, its new parent companies, as soon as its current contracts with Enel come to an end. Only a fraction will be sold to the Italian electricity pool and Interpower will have no customers or commercial strategy of its own.
As a consequence, the joint venture will not perform on a lasting basis the normal functions of an autonomous economic entity and cannot be considered as a concentration within the meaning of Article 3.2 of the Merger Regulation.
The Commission has, therefore, decided that the proposed operation does not fall under the Merger Regulation.
The sale of Interpower by ENEL has been required by the so-called Italian Bersani Decree, which implemented in Italy European Union directive 96/92/EC liberalising the EU electricity market. In total, Italy's main electricity company ENEL has been required to sell at least 15GW of its generation capacity by January1st, 2003.
For this purpose, ENEL has already divested two electricity generation companies, Elettrogen and Eurogen, in 2000 and 2002 respectively. Elettrogen was acquired by Endesa, and Eurogen by Edipower. These operations were notified and qualified for regulatory review.
Article 3.2 of the Merger Regulation says that a joint venture shall constitute a concentration (and, therefore, require clearance under the Regulation) if it performs "on a lasting basis all the functions of an autonomous economic entity". See also 1998 Commission Notice on the concept of full-function joint ventures on
which provides guidance on how the interprets Art 3 in relation to joint ventures.