Brussels, 5th December 2007
The European Commission has cleared under the EU Merger Regulation the planned acquisition of Lentjes GmbH of Germany by Energy & Environment AG & Co KG (AEE), which forms part of the Austrian A-Tec group. Lentjes and AEE have overlapping activities primarily in the engineering and supply of waste-to-energy plants, used for the burning of municipal waste. The Commission's in-depth investigation (see IP/07/1208), opened on 3 August 2007, has shown that the concentration would not significantly impede effective competition in the European Economic Area (EEA) or a substantial part of it.
Competition Commissioner Neelie Kroes said: “The Commission had to make sure that the concentration would not harm competition in a sector of increasing economic and environmental importance, in particular since landfill is no longer an acceptable option for waste disposal. Our in-depth investigation showed that many credible competitors would remain in the markets after the merger and the Commission is satisfied that effective competition will be maintained.”
Both AEE and Lentjes are active in engineering and supplying a range of energy and environmental solutions. In particular, their activities overlap in the areas of grate-fired waste-to-energy plants for incinerating municipal waste, plants based on so-called "fluidised bed technology" (used for example for burning coal or sludge) and systems for the desulphurisation of the flue gases resulting from the burning process.
The Commission opened an in-depth investigation over serious doubts as to the compatibility of the proposed transaction with the Single Market in the area of grate-fired waste-to-energy plants for incinerating municipal waste. The Commission also had doubts whether the merger would lead to supply problems for competitors in the market for plants based on fluidised bed technology (downstream), since Lentjes seemed to be one of few suppliers of a specific flue gas desulphurisation technology (upstream).
The Commission has analysed the impact of the proposed operation in its in-depth investigation and concluded that the transaction would not significantly impede effective competition in the area of waste-to-energy plants. Based in particular on an in-depth analysis of bids in Europe over the past five years, the Commission found that a number of effective competitors would remain in this market and that customers would continue to have a number of options to choose from when selecting their suppliers. The investigation also revealed that significant competitive constraint from suppliers tendering for parts of a plant (lots) would continue to exist, because a number of engineering companies are providing services to assist customers in unbundling turnkey projects into lots.
As regards the potential foreclosure issue on the market for plants based on fluidised bed technology, the in-depth market investigation has shown that other suppliers could provide substitutable flue gas desulphurisation technologies and there are also a number of credible competitors which are already vertically integrated.
More information on the case will be available at: