Anti-Trust Commission bars INERCOM from buying CEZ assets

During 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 produces vertical effects on downstream markets, such as: electricity distribution, electricity supply / supply markets, electricity trade, and trade-related balancing co-ordination services.

On the electricity distribution and supply market, the acquired group has a natural monopoly position for the territory defined by its licenses. In parallel, CEZ Electro Bulgaria and CEZ Trade Bulgaria form a substantial market share based on traded volumes of electricity on 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 created that the notified transaction may lead 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 for 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 could have a direct impact and threat 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 would hinder effective competition in the analyzed markets.