Eon deal in brussel on the home straight

eon deal in brussel on the home straight

It could be one of the last rough decisions by EU competition commissioner margrethe vestager. By friday of next week (20. September), the deadline for reviewing the rough deal between the electricity giants eon and RWE is still running.

The two essen-based groups want to break up RWE subsidiary innogy and completely redivide its business areas. Eon to get innogy’s grids and retail business, RWE to get innogy and eon’s renewables business.

The RWE part of the deal was won by vestager, whose term of office ends on 31 december. October ends, has already been waved through. The review of the planned new eon is considered to be far more complex. In germany alone, eon will have around 14 million electricity and gas customers after the innogy takeover. "There is a threat of new, cartel-like structures that will undermine the liberalization of the electricity market," warned jutta paulus, a member of the green european parliament.

"The new eon will turn the energy market upside down with its market power," expects udo sieverding, energy expert at the consumer center of north rhine-westphalia. "Whether this will be a disadvantage for private customers is primarily up to the customers themselves."In the future, they will have to monitor their electricity tariffs even more closely, pay attention to the total costs of additional services such as smart meters or service offers, and make use of switching options.

But that could become more difficult in the future, fears a group of municipal utilities. Following the takeover of innogy, eon will have around 150 brands through its shareholdings in numerous regional utilities, according to its statement on the EU merger control proceedings. Eon could thereby dominate comparison and brokerage platforms such as check24 and verivox in a way that "effectively excludes competitors from this opportunity to acquire customers. The EU must therefore "ensure transparency for consumers in their choice of supplier".

Eon rejects accusation of too much market power. Chief executive officer johannes teyssen repeatedly emphasized that competition was "in no way threatened in germany. There would continue to be fierce price competition because customers could choose from around 100 suppliers in almost every zip code area. Following the integration of innogy, eon "will soon be able to offer all customers improved services and products from a single source. To get the green light from brussel, eon has made some concessions. Among other things, essen in germany wants to get rid of 260.000 customers who purchase heating power.

Competition in the electricity market must be monitored "closely and critically" by the federal network agency and the federal cartel office, demanded consumer user sieverding. The two authorities therefore need sufficient staff and political backing. If control is ensured, the merger "does not necessarily have to be a disadvantage" for consumers.

Vestager had recently proved to be quite critical of rough mergers. In the failed merger of train giants siemens and alstom, it insisted on safeguarding competition in the european high-speed train market. Vestager also stood firm on the failed steel merger between thyssenkrupp and indian competitor tata "to prevent serious damage to european industrial customers and consumers". In response to the review of eon’s plans, she had said that the takeover of innogy "must not result in any price increases".


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