Essent Nuon merger on despite grid split

Dutch energy firms Essent and Nuon are to go ahead with their plans to merge, despite the government’s decision to make them split off their distribution grids, Essent said on Friday.

On Thursday, economic affairs minister Maria van der Hoeven told parliament she was giving energy firms 2.5 years to split off their network operators from the commercial arms which produce and distribute electricity.
The scheme is fiercely opposed by the publicly-owned power firms such as Essent and Nuon, who say it will make them vulnerable to takeovers.
Last year, the upper house of parliament ruled that energy firms would be split if there were a European directive to this effect or if the public function of the grids were threatened by the energy firms forming international alliances.
According to the Financieele Dagblad, Van der Hoeven has based her decision on this last point. Essent, Nuon and Delta (Holland’s first, second and fourth largest energy concerns) have an ‘unmistakeably’ international strategy, the paper quotes her as saying.
The aim of splitting up the energy companies is to create a genuinely independent distribution infrastructure so that energy firms without grids – market newcomers – can compete on equal terms.
The competition authority NMa has expressed concerns about the Essent Nuon merger, which will create a company with €12bn in annual sales and five million customers.

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