EU Clears E.ON Sale Of German Power Lines To TenneT

Published: 08-Feb-2010

The European Commission has cleared the proposed acquisition of Transpower Stromubertragungs (TPS) of Germany, a wholly-owned subsidiary of E.ON, by TenneT of The Netherlands. TPS is one of the four electricity Transmission System Operators in Germany.

TenneT is the only transmission system operator in The Netherlands. After examining the operation, the commission concluded that the transaction will not impede effective competition in the European Economic Area (EEA) or any substantial part of it.

TenneT operates the Dutch national extra-high and high voltage electricity transmission system. TPS operates extra-high voltage lines and associated transformer stations in Germany. The commission examined the competitive effects of the proposed transaction, notably the horizontal overlaps between TenneT and TPS relating to the cross-border transmission of electricity through interconnectors.

The commission's investigation found that the proposed merger will not affect the competitive conditions in the relevant markets. TenneT is a wholly unbundled transmission system operator and therefore it would have no incentive to allocate capacity in a way that discriminates in favor of any other market player.

The proposed transaction derives from E.ON's commitment to the commission, to separate and subsequently divest its transmission system business, in compliance with a commission decision of November 26, 2008 under EU rules prohibiting the abuse of a dominant market position, opening up the German electricity market to competition.

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