Compass Lexecon Advises E.ON During EC Investigation of Its Acquisition of Innogy

Following a Phase-II investigation, the European Commission (“EC”) cleared the acquisition by E.ON of Innogy’s distribution and consumer solutions business as well as certain electricity generation assets of Innogy, subject to conditions. This Transaction is part of an extensive asset swap between E.ON and RWE. Both headquartered in Germany, E.ON and Innogy are active across the whole energy supply chain, including generation, wholesale supply, transmission, distribution, retail supply, and energy-related activities (such as metering and e-mobility). Both companies are present in several member States, although their activities mainly overlap in Czechia, Germany, Hungary, Slovakia, and the UK.

Compass Lexecon experts advised E.ON throughout the merger control proceedings. They developed and presented to the EC several economic analyses to assess the likelihood of unilateral effects in the energy market in Germany, the UK, and three CEE countries (Czechia, Hungary, and Slovakia).

Economic Analyses of German, UK and CEE Markets

Compass Lexecon prepared, inter alia, a margin-concentration analysis of the German retail market, as well as other economic analyses based on market share data at the municipality-level, tariffs, metering points, and switching data, which showed that the merging parties were rarely each other’s rivals in the supply of regular electricity and gas and will continue to face strong competitive pressure from many suppliers. An analysis of concession tender data for electricity and gas distribution networks in Germany also showed that the merging parties focused on different geographic areas.

For the UK and CEE markets, they conducted several analyses related to market definition and closeness of competition through, for example, the analysis of switching, tariffs, margins, and tender data.

Compass Lexecon experts also provided support in the assessment or remedies.

The Advisory Team

The Compass Lexecon team included Enrique Andreu, Miguel de la Mano, Urs Haegler, Thilo Klein, and Nadine Watson, assisted by Martina Caldana, Daniel Coublucq, Guillaume Duquesne, Scott Holbrook, Valérie Meunier, Orjan Sandewall, Bernardo Sarmento, with several economists and analysts. Compass Lexecon worked alongside Christian Ahlborn, Christoph Barth, and Carsten Grave of Linklaters.

SEE OUR CASES