The Danish Competition Council has approved SEAS-NVE A/S’ acquisition of several companies from Ørsted A/S subject to commitments
On 28 May 2020, the Danish Competition and Consumer Authority (hereinafter “DCCA”) received a complete notification of SEAS-NVE A/S’ (hereinafter “SEAS-NVE”) acquisition of sole control of Radius Forsyningsnet A/S (hereinafter “Radius”), Ørsted City Light A/S (hereinafter “Ørsted City Light”) and Ørsted Privatsalg El & Gas A/S and Ørsted Varmeservice A/S (hereinafter “Ørsted B2C”) from Ørsted A/S.
SEAS-NVE is a cooperatively-owned energy and fibre-optic group. SEAS-NVE owns the electricity grid in Western and Southern Zealand and the islands in the area and sells electricity, natural gas and service on gas boilers to private and corporate customers. Furthermore, SEAS-NVE operates and maintains streetlights and has activities within production of renewable energy, e-mobility solutions for electric cars and fibre-optic broadband.
Radius owns the electricity grid in the Copenhagen area, Northern Zealand and parts of Central Zealand. Ørsted B2C sells electricity, natural gas and service on gas boilers to primarily private customers. Ørsted City Light operates and maintains streetlights.
Within Denmark SEAS-NVE and the Ørsted companies are active on the markets for:
- Distribution of electricity in each of the parties’ networks.
- Retail supply of electricity to consumers (and small and medium-sized businesses) in Denmark.
- Outdoor lighting in Denmark.
- Retail supply of natural gas to consumers (and small and medium-sized businesses) in Denmark.
- Service on gas boilers in each of the former distribution areas.
Based on an overall assessment the DCCA considered that the merger would give rise to unilateral effects in the market for retail supply of natural gas to consumers (and small and medium-sized businesses). This would in particular be in the form of risk of higher prices on natural gas to consumers, because the transaction would unite the two largest providers of natural gas to consumers in Denmark.
As regards the other markets, the DCCA found that the merger would not result in a significant impediment to effective competition.
SEAS-NVE offered commitments in order to address the concerns of the DCCA. SEAS-NVE committed to divest all of the 107.000 private natural gas customers in Ørsted B2C. The divestment of the gas customers will ensure that competition in the market for retail supply of natural gas to consumers (and small and medium-sized businesses) is not reduced significantly as a result of the merger.
Therefore, the Danish Competition Council assessed that the commitments were sufficient to address the unilateral effects identified by the DCCA.
On 24 June 2020, the Danish Competition Council approved the merger subject to commitments.
At the time of the decision, SEAS-NVE has entered into an agreement with OK a.m.b.a. to aquire the private natural gas customers in Ørsted B2C. The transaction is notifiable to the DCCA.