Brussels, 23 July 2012
Mergers: Commission approves joint venture of Tauron and KGHM in Polish electricity sector
The European Commission has cleared under the EU Merger Regulation the proposed creation of a joint venture by the electricity producer Tauron Wytwarzanie and the copper producer KGHM Polska Miedz, both of Poland. The joint venture (Elektrownia Blachownia Nowa Sp. z o.o.) will construct and operate a new 850 MW gas-fired power plant in Poland. The Commission's investigation confirmed that the transaction would not raise any competition concerns, since the market share of the newly created entity would be limited and it would face a number of credible competitors on the Polish electricity markets.
The Commission examined the effects on competition of the proposed transaction in the markets for the generation, wholesale and retail supply of electricity, where both Tauron and the JV will be active. Although Tauron is one of the major electricity providers in Poland, it would continue to face a number of strong competitors such as PGE, EdF, Energa or Enea.
The Commission also analysed vertical links which could arise between the activities of the joint venture and Tauron on the one hand, and copper markets where KGHM is active, on the other hand, as electricity is an input for KGHM's copper business. However, none of these would give rise to competition concerns, as Tauron mainly supplies electricity in Poland, while KGHM and its competitors are active globally. In addition, KGHM's electricity needs in Poland are limited compared to Tauron's output.
The Commission therefore concluded that the transaction would not raise competition concerns.
The transaction was notified to the Commission on 18 June 2012.
Companies and products
TAURON is a Polish energy group mainly active in the generation, wholesale and distribution of electricity in Poland, but also in other countries in Central and Eastern Europe. The company is also active in coal mining and the generation and sale of heat.
KGHM is a Polish copper producer active in copper mining and production, as well as in the production of precious and non-ferrous metals.
Merger control rules and procedures
The Commission has the duty to assess mergers and acquisitions involving companies with a turnover above certain thresholds (see Article 1 of the Merger Regulation) and to prevent concentrations that would significantly impede effective competition in the EEA or any substantial part of it.
The vast majority of notified mergers do not pose competition problems and are cleared after a routine review. From the moment a transaction is notified, the Commission generally has a total of 25 working days to decide whether to grant approval (Phase I) or to start an in-depth investigation (Phase II).
More information on the case is available at: