WRITTEN QUESTION E-2303/02

by Erik Meijer (GUE/NGL) to the Commission

(25 July 2002)

Subject: Giant merger between the two largest energy undertakings in Germany carried out with a view to conquering more easily the energy market in other EU Member States

1. Is the Commission aware that, in Germany, Ruhrgas AG distributes 58 % of all natural gas in the country, through its ownership of a pipeline network and imports, and that Eon AG supplies almost one-third of the country's electricity, with the result that they hold a seriously dominant position in the two major sectors of the German energy market?

2. Has the Commission been informed that a further concentration of control of German energy supplies, with Ruhrgas AG being taken over by Eon AG, was rejected in spring by the German equivalent of the Monopolies and Mergers Commission (Kartellamt) but that it may now go ahead because that decision was declared invalid by means of a Decree published on 5 July 2002 by Dr Alfred Tacke, State Secretary for Economic Affairs, on behalf of the German Government?

3. Can the Commission confirm that, in May, the German Monopolies Commission also found the merger inadmissible unless a number of shares in other undertakings, such as VNG in Leipzig, were sold, a sale which the German Government is now requiring of the undertakings to be merged?

4. Is this approval of the merger, despite fears of a misuse of power and domestic price increases, largely based on efforts by the German Government to create a strong German concern which, thanks to the EU's liberalisation of the market, may acquire a significant market share in other EU Member States?

5. Does the Commission take the view that this Decree might set a precedent? Might it act as an incentive for the creation of more of these giant mergers at national level?

6. Does this procedure fit in with the Commission's policy on mergers and the possible creation of monopolies? Does this merger decision provide the Commission with an opportunity to intervene, partly on the grounds of the cross-border impact on other Member States? Will the Commission seize that opportunity?

Answer given by Mr Monti on behalf of the Commission

(24 September 2002)

1. The Commission is aware of the findings of the prohibition decisions adopted by the German Federal Cartel Office in January and February 2002.

2. The Commission has been informed that on 5 July 2002 the German Federal Minister of Economics and Technology granted ministerial approval for the E.ON/Ruhrgas merger based on § 42 of the German Cartel Law. The decision was adopted by Dr Alfred Tacke, State Secretary for Economic Affairs. It overrules the said prohibition decisions and a negative recommendation by the German Monopoly Commission.

3. The German Monopoly Commission, by weighing up the severe restrictions on competition with the public interest arguments put forward by E.ON, reached the conclusion that ministerial approval should not be granted. In the context of its opinion, the German Monopoly Commission also discussed possible remedies such as unbundling and a divestiture of Thüga AG, a subsidiary of E.ON, which holds stakes in 130 local and regional utility companies.

4. The Commission is not in a position to comment on the underlying reasons for the ministerial approval.

5. The ministerial approval was granted for a specific merger case. Future mergers in the energy sector have to judged on the basis of the merits of each case.

6. The procedure in this case was based on German Cartel Law and carried out by the German authorities in the framework of their own policy. The Commission has no indication that this case had (has) Community dimension within the meaning of the European Merger Regulation(1) and that it had thus jurisdiction to deal with it.

(1) Council Regulation (EEC) No 4064/89 of 21 December 1989 on the control of concentrations between undertakings OJ L 395, 30.12.1989 (whole text republished in OJ L 257, 21.9.1990).