Bundeskartellamt clears acquisition of ESW GasVertrieb GmbH by Enovos

Yesterday the Bundeskartellamt cleared the acquisition of ESW GasVertrieb by Enovos after a thorough examination of the merger project. Enovos is the result of a merger between two Luxembourg suppliers of electricity and gas and the German Saar Ferngas which was completed in 2009. It is the major gas supplier in Luxembourg, the federal state of Saarland and the southern part of Rhineland-Palatinate.

President Andreas Mundt stated: "Although competition in the gas sector has increased, there are still barriers to market entry. In addition, in some regions competition in the gas sector is even weaker than in the rest of the country. Remunicipalisation has only partly resulted in a stimulation of competition. We expect, however, that competition in this sector will increase in the coming years."

The Bundeskartellamt has examined this merger case in detail to review its previous market assessment in view of the increasing competition in the gas sector. Currently, the Bundeskartellamt still assumes geographic markets for the supply of end consumers and the distribution level that are limited to the respective network areas and are not nationwide (the distribution level concerns the supply of municipal utilities by, i.a., gas transmission companies).

At present, Enovos has a dominant position in the market for the supply of downstream distributors with gas in the Saarland and southern Rhineland-Palatinate. The Bundeskartellamt expects, however, that competition in this area will significantly increase in the coming years. Therefore, the merger does not strengthen the market position of Enovos to an extent that would harm competition.