BULGARIA: The CPC has prohibited the acquisition of CEZ's undertakings by EUROHOLD

7 November 2019 — Andrei Victor
The Bulgarian Commission on Protection of Competition - CPC decided to prohibit the acquisition of CEZ's undertakings in Bulgaria by financial group EUROHOLD Bulgaria

According to the Decision No. 1169/24.10.2019, "based on the provided information and evidence during the investigation with regard to case No. CPC/822/2019 the Commission's analysis found that the notified operation leads to conglomerate effects in the insurance market and the electricity sector. The proposed transaction will lead to significant increase in the market power of the undertakings concerned and they will have the possibility to act in a great extent independently from their competitors".

On April 1, financial and insurance group Eurohold Bulgaria announced its binding offer for the Bulgarian assets of Czech energy group CEZ, the largest public holding company in the country and one of the leading independent business groups in Central and Southeastern Europe. Two months later, in June, the two parties signed the agreement for EUR 335 million.

The assets of CEZ in Bulgaria are comprised of power utility CEZ Distribution Bulgaria, power supplier CEZ Electro Bulgaria, licensed electricity trader CEZ Trade Bulgaria, IT services company CEZ ICT Bulgaria, solar park Free Energy Project Oreshetz, biomass-fired power plant Bara Group and CEZ Bulgaria.

On the ground of the entire analysis the Commission concluded that merging the experience, the economic resources and the market positions of the parties in the electricity- and insurance sectors raises concerns that the notified concentration leads to the creation or strengthening of a dominant position of the united group and significantly impedes the effective competition in the relevant markets.

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