Essent and Nuon need permit to merge

Tuesday 22 May 2007

Energy companies Essent and Nuon will need to apply for a permit to merge because of concerns about their dominant role in wholesale electricity and the consumer markets for power and gas, the competition authority NMa said on Tuesday.

In a statement, the NMa said it 'envisages competition concerns on the electricity wholesale market and on the market for the supply of gas and electricity to small consumers. This also applies to the balancing market for electricity.' The wholesale gas market was not seen as a problem.

The two companies have already offered to divest some production capacity to meet the NMa's concerns. 'At this stage of the investigation, it is not possible to ascertain whether the proposal presented by Nuon and Essent will remove any possible concerns entirely,' the NMa said.

Once the two companies formally apply for a permit to merge, the NMa will begin a more detailed investigation into the effects of the merger. The merger would create a company with €12bn in annual sales and five million customers.

© DutchNews.nl

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