The European Commission is investigating the proposed acquisition of Innogy by Eon under the EU merger regulation over concerns that the deal may reduce competition in retail markets for electricity and gas in several member states.
Both companies have a strong combined market position in several retail markets on a national or sub-national level in Germany, Czech Republic, Slovakia and Hungary and the proposed acquisition will remove a significant competitor in these member states, the commission said.
It is concerned that the remaining competition would be insufficient to constrain the market power of the combined entity and avoid price increases for consumers.
European commissioner in charge of competition policy Margrethe Vestager (pictured) said: “European households and business customers should be able to buy electricity and gas at competitive prices.
“Our in-depth investigation aims to ensure that the acquisition of Innogy by Eon leaves sufficient competition in the market to allow for this and does not lead to price increases.”
Eon and Innogy have decided not to submit commitments during the initial investigation to address the commission’s preliminary concerns, the latter said.
It has until 23 July 2019 to take a decision.
The opening of an in-depth inquiry does not prejudge the final result of the investigation, the commission said.
German companies Eon and RWE, which controls Innogy, are engaged in a complex asset swap that will see the former focus on the distribution and retail supply of electricity and gas, while the latter will be primarily active in upstream electricity generation and wholesale markets.
On 26 February, the commission approved another part of the deal that would see RWE acquire certain generation assets held by Eon.