The Bundeskartellamt has cleared the 24% participation of RWE AG (RWE) in the municipal utility Stadtwerke Unna GmbH (SWU) after in-depth examination under merger control. Despite RWE's market position in the electricity markets, the merger project will not have any strengthening effects.

The President of the Bundeskartellamt, Andreas Mundt, stated: "The Bundeskartellamt prohibits merger projects which would lead to the creation or strengthening of a dominant position. In our view, participations of the large energy companies in municipal utilities must be seen critically, in particular if they are used by the energy producers to foreclose the market by securing their position as suppliers. According to the Bundeskartellamt's investigations, the current case does not pose this risk."

The minority participation in SWU had already been acquired in the late 1990s by RWE's predecessor VEW. However, this participation was limited to twelve years. The project now notified and examined aims at a permanent participation of RWE in SWU.

Despite the existing minority participation of RWE, which had to be examined once again, Stadtwerke Unna has so far proven to be an independent buyer of electricity and gas. In the past, the usual practice was to have contracts covering the full supply of municipal utilities by the upstream supplier which in most cases also operated the network. This also applied in SWU's case. Meanwhile network operators and distributors have largely been unbundled. The liberalisation process has expanded product portfolios and fundamentally changed procurement behaviour, which is also apparent in the case of SWU. Several years ago, SWU had already terminated its long-term contracts for the full supply of both electricity and gas by RWE. Despite RWE's participation, SWU had its own market-oriented procurement management system. The Bundeskartellamt's conclusion is that, despite RWE's participation, SWU will continue to operate independently and in a market-oriented manner.