The German Federal cartel office is questioning utility E.On’s attempt to gain a majority stake in natural gas supplier Ruhrgas, according to newspaper reports Monday. A confidential letter, sent on Friday expresses concern that the proposed deal could create an oligopoly in gas supply and reinforce E.On’s position in the electricity market.
An E.On spokesman declined to comment on the reports, but industry sources said that E.On and the competition authorities were negotiating a compromise, adding the cartel office had not yet made a final decision.
Cartel Office President Ulf Boege has expressed concerns that the proposed acquisition of the 34 per cent stake in Ruhrgas now jointly held by the UK’s Vodaphone and German groups ThyssenKrupp, RWE, and RAG, would give Ruhrgas strong influence over a host of local and regional gas suppliers.
Simultaneously, E.On would strengthen its position in the electricity market, Boege was quoted as saying in the letter.
In November, E.On announced plans to increase to a majority its stake in Ruhrgas, a step that would enable it to expand its domestic power generation and gas supply activities and tap international supply sources.
Last week, the cartel office said it would block in its current form plans by E.On to swap its production unit Veba Oel – which includes Aral, Germany’s largest filling station chain – for BP’s 25.5 per cent stake in Ruhrgas.
It is expected that E.On will be willing to grant concessions in order to push through the strategically significant ownership position in Ruhrgas. Such concessions might include the