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Office of Competition and Consumer Protection

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Conditional consent for concentration: PGE - EDF Polska

< previous | next > 05.10.2017

Conditional consent for concentration: PGE - EDF Polska
  • UOKiK gave consent for PGE takeover of EDF Polska.
  • The transaction may take place under condition that most of the electrical power produced by the acquired company is sold on the stock exchange.
  • Under this condition the concentration will not compromise competition.

The application for a permission to enact PGE takeover of EDF Polska was received by the UOKiK in June 2017. The parties to the transaction are involved in production, sale and distribution of electrical power. EDF produces most of the energy in the Elektrownia Rybnik (Rybnik Power Station) .

In July the Authority decided to proceed to the second stage. It was necessary to carry out market research. It covered the largest entrepreneurs operating in the power sector. UOKiK also asked for the opinions of the Energy Regulatory Office and the Polish Power Exchange.

The analysis of the collected material has shown that the transaction can limit competition. That is why the Authority sent to the entrepreneur its reservations concerning concentration. UOKiK pointed out that PGE could gain dominant position in the electrical power production and distribution market. This in turn could translate into a drop in turnover on the Polish Power Exchange and negatively affect the retail market.

UOKiK argued that sales through the Polish Power Exchange limit the strength of the largest players in the market, for example, by enabling wholesale purchases of electrical power by smaller companies. Meanwhile, the amount of energy that large power companies sell on the stock market is decreasing. PGE company takeover of EDF Polska may cause further decline. As a result, PGE will be able to sell most of the power within its own capital group, and this could hinder purchase of energy by its competitors who do not have their own production sources.

In response to the reservations, the company proposed a condition. UOKiK agreed that the implementation of the entrepreneur's proposal would offset the transaction’s negative effects on the competition.

According to the imposed condition, in the period 2018-2021, PGE will have to sell all the energy produced by Elektrownia Rybnik (Rybnik Power Station). This quantity can decrease only in case when the whole PGE group becomes obliged to sell more energy. Moreover, the condition will not apply if the power station ceases to belong to PGE.

- Execution of the condition will result in the concentration having no adverse effect on competition. The increase in market power of PGE will be limited. Practically all the electrical power produced so far by EDF Polska, which has been sold to wholesale customers, will be offered on the stock exchange. None of the entrepreneurs interested in purchasing this energy will be discriminated against – says the president of UOKiK, Marek Niechciał.

According to the regulations, the transaction is subject to notification to the antitrust authority if it involves entrepreneurs whose combined turnover in the preceding year exceeded 1 billion euros worldwide or 50 million euros in Poland. When evaluating a concentration, UOKiK may prohibit the transaction, authorize its implementation, or make the consent conditional on the fulfilment by the trader of additional provisions. The decisions are valid for two years. Since 2004, this has been the 25th decision that imposed obligations on the transaction applicant, and the first this year.

The decision is not legally binding. The applicant is entitled to appeal to the Court of Competition and Consumer Protection. At the same time we would like to inform you that UOKiK website contains information on all antitrust proceedings conducted by the Authority in matters of concentration.

Additional information for media:

UOKiK Press Office
Pl. Powstańców Warszawy 1, 00-950 Warsaw
Phone 695 902 088
E-mail: [SCODE]Yml1cm9wcmFzb3dlQHVva2lrLmdvdi5wbA==[ECODE]

Twitter: @UOKiKgovPL

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