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EnBW's increase in shareholding in MVV unproblematic under competition law

Date of issue: 14.12.2017

The Bundeskartellamt has cleared the acquisition by EnBW AG of 6.28 per cent of the shares of MVV Energie AG, i.e. an increase in EnBW's share of 22.48 per cent to 28.76 per cent. Although EnBW has for the first time acquired a blocking minority, the acquisition will not significantly impede effective competition in the waste management and energy supply markets concerned.

Andreas Mundt, President of the Bundeskartellamt: "In the energy supply sector the two companies will not reach a critical position in any of the markets concerned. However, the merger also affects regional waste management markets. Here our in-depth examination focused on waste incineration. In the final analysis the increase in shares does not impede effective competition in this sector either. In spite of acquiring a blocking minority, EnBW will not gain a substantial influence on MVV which is solely controlled by the City of Mannheim.

The market for the incineration of household waste (untreated municipal waste) is characterised by competition for the award of public tenders issued by the competent local authorities. The Bundeskartellamt has examined whether the veto rights gained by acquiring a blocking minority could lead to EnBW having a dominant position on this market. In this context the facts in particular that the veto rights were limited under the articles of association to the indispensable statutory protection of shareholders and that there were no further interlocks made it unlikely that a dominant position would be created. Thus it could not be assumed that EnBW would have a substantial influence on MVV which is exclusively controlled by the city of Mannheim.

The key focus of the investigations in the energy supply area was the market for the first-time sale of electricity, the provision of balancing energy and, for the first time, the redispatch sector. The term redispatch refers to the management of capacity congestion in the transmission network by intervening in the specific operation of power plants. Operators of power plants in Germany with a nominal capacity of 10 MW or more have to provide redispatch when requested by transmission system operators. The level of entitlement to adequate remuneration is regulated in the Energy Industry Act. However, foreign plant operators are not subject to these regulations and can also negotiate the level of remuneration for the provision of dispatch. 

According to the findings of the investigations the parties concerned would not attain a position post merger in any of the affected areas of energy supply which in the view of the Bundeskartellamt would significantly impede effective competition. In the case of redispatch, this finding is based in particular on the due consideration of quantities of electricity generated in power plants abroad. Last year these quantities reached a significant level. 

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