Bulgaria's competition regulator bars Eurohold from buying CEZ assets

Bulgaria's competition regulator bars Eurohold from buying CEZ assets

Bulgaria's competition authority said on Thursday it barred financial and insurance group Eurohold Bulgaria from acquiring the local assets of Czech energy group CEZ.The Commission for Protection of Competition (CPC) has decided to ban the acquisition of the assets of CEZ by Eurohold Bulgaria because combining the experience of the economic resources and market positions of the two groups in the electricity and insurance sector creates prerequisites for the notified deal to lead to the establishment or strengthening of dominant position, the anti-trust body said in its decision.If concluded the deal would lead to considerable advantage for the participants in the concentration which would hamper effective competition on the respective markets, the regulator said. The decision can be appealed before the Sofia Administrative Court.Commenting on the regulator's decision, Eurohold said that as a public company with a number of international and institutional investors it will wait for a decision of its supervisory board on the further steps related to the deal and the development of its investment strategy in the energy sector."The funding for the deal has been secured by two global investment banks. Considering the target investment in the acquisition of CEZ Group’s companies, including the price of the deal, the purchase of the minority shares, the repayment of the debt of the acquired companies and the investment strategy for their development, a total amount of around 500 million euro [$555 million] would have been allocated in Bulgaria according to the holding’s estimates," the company said in a statement following the regulator's decision. The CPC decision followed an in-depth probe of the deal for the acquisition of the CEZ assets launched by the anti-trust body on October 10. In relation to the probe Eurohold Bulgaria said it has submitted documents proving evidence that it and its units do not have a leading position in terms of suretyship insurance on the domestic market and do not offer suretyship insurance to electricity traders in Bulgaria, the financial and insurance group said in a statement.The assets of CEZ in Bulgaria comprise power utility CEZ Distribution Bulgaria, power supplier CEZ Electro Bulgaria, licensed electricity trader CEZ Trade Bulgaria, IT services company CEZ ICT Bulgaria, solar park Free Energy Project Oreshetz, biomass-fired power plant Bara Group and CEZ Bulgaria.CEZ's earlier deal with Sofia-based Inercom for the sale of the group's assets in Bulgaria fell through as CEZ failed to obtain approval from the CPC.

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