24 November 03 – The German Cartel Office said on Monday it had blocked E.ON’s EURO250m purchase of 49.9 per cent of energy distributor Stadtwerke Luebeck as the deal would bolster E.ON’s dominant market position.
“The proposed equity investment would let one expect a strengthening of a market-dominating position in selling electricity and gas on both federal and local markets,” the antitrust watchdog said in a statement.
E.ON and rival RWE, the two biggest German utilities, are in a drive to get more access to the lucrative end-consumer market for electricity and gas by buying stakes in local utilities. The cartel office has recently taken a firm position to rein in their influence.
“A further strengthening of the market domination would increase the leeway the companies have, and by that way, their leeway to increase prices at the expense of customers,” the watchdog said.
E.ON had offered concessions to avoid the block, but the offer had not been sufficient, the Cartel Office said. It did not specify which concessions E.ON offered.
E.ON declined to comment immediately and said it had to review the decision first.