CPC Prohibit "Inercom" from Buying "CEZ Bulgaria"
The Commission for Protection of Competition (CPC) stopped Incercom from acquiring CEZ's assets in Bulgaria.
Currently, the bidder company, Inercom, may appeal the decision of the antimonopoly committee to the Supreme Administrative Court within 14 days. The period begins to run from the moment the company is notified. The deal was discussed by a temporary committee in parliament, which issued a special report on this.
In the course of the investigation, the CPC found that there was a horizontal overlap between the activities of the participants in the concentration on the market for the production and wholesale supply of electricity from photovoltaic power plants. Also, the transaction also produces vertical effects on downstream markets, namely: electricity distribution, electricity supply / supply markets, electricity trade, and trade-related balancing co-ordination services , says the report.
In the electricity distribution and supply market, the acquired group has a natural monopoly position for the territory defined in its licenses to carry out these activities. In parallel, CEZ Electro Bulgaria AD and CEZ Trade Bulgaria EAD form a substantial market share based on traded volumes of electricity in the free market.
On the basis of the overall analysis, it can be concluded that, given the vertically integrated CEZ group, which has a stable financial resource and experience in the electricity sector, preconditions are that the notified transaction leads to the establishment or strengthening of the dominant position of the merged group.
In view of the wide range of activities of the acquired companies and their importance to the country's electricity system, there is reason to assume that the current concentration is of strategic importance for the country and its potential effects would have a direct impact on national security.
The Commission considers that the existence of significant vertical effects would lead to a significant advantage for the merging parties over their competitors, which in turn would impede effective competition in the analyzed markets.
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