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IP/00/125

Brussels, 8 February 2000

Commission authorises joint venture between Eastern Electricity and London Electricity

The European Commission has approved, under the Merger Regulation, a proposed 50:50 joint venture between Eastern Electricity (TXU Europe Group) and London Electricity (EdF group) to engage in utility network asset management and operating services, mainly for electricity distribution companies. The Commission's investigation showed that the proposed concentration will not lead to the creation of a dominant position on the market.

TXU Europe Group plc, is a wholly owned subsidiary of TXU Company, an American energy company. The principal activities of TXU Europe are the generation and distribution (through Eastern Electricity plc) of electricity, energy trading and electricity and natural gas supply. It operates primarily in the UK. London Electricity plc mainly distributes electricity in the London area and supplies electricity in England and Wales. It is ultimately controlled by Electricité de France, a French wholly state-owned group, whose principal activity is the generation, transmission, distribution and supply of electricity in France.

Eastern and London Electricity intend to set up a new 50:50 joint venture company that will provide utility network asset management and operation services to utility network asset owners, mainly to electricity distributors.

The UK regulatory framework, based on incentive competition, has created pressure on the distribution licence holders to realise efficiency savings. The merger of the parties' respective network asset management and operation activities is designed to enable the parties to achieve the greater efficiencies.

The envisaged joint venture will be the first operator on the new market for utility network asset management and operating services in the UK. As the establishment of the joint venture will not prevent potential competitors from entering, the proposed concentration will not lead to the creation of a dominant position on the new market.

For these reasons the Commission declared the concentration compatible with the common market and with the functioning of the EEA Agreement.


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