site.btaAntitrust Commission Notified of Inercom's Plans to Acquire CEZ Group's Local Assets

Sofia, March 15 (BTA) - The Commission for Protection of Competition (CPC) announced it was notified on Wednesday of the intention of Inercom Bulgaria to become the sole owner of CEZ Group's Bulgarian business.

The CPC will analyse the concentration along the lines of the companies market position before and after the concentration, their economic power, their access to supplies or markets, any legal or other barriers to entry, etc.

The Commission recalls that it is outside its remit to look into the origin of the money with which the notified transaction is to be financed, or to analyse the voidability of contracts under the Obligations and Contracts Act.

The CPC analysis has to find out if the deal will increase the market power of the companies involved to an extent that it is likely to harm effective competition or the customers' interests by reducing the diversity of goods and services, or to curb innovation.

The CPC will approve the concentration if it does not create or strengthen a dominant position, as a result of which effective competition would be significantly impeded in the respective market.

Milena Stoeva, who chairs the Board of Directors of Inercom Bulgaria, and the company's financial adviser Vesselin Zahariev said the decision whether or not Bulgaria will participate in the deal rests with the Czech owner of the assets. They told reporters that CEZ's headquarters in Prague would analyse the option of the Sate's participation.

Talks on the financing of the deal are continuing, Zahariev said. The financing will be structured in the standard manner for international transactions - part of it will be own capital and another part will come from banks. Zahariev said the share of each part was being negotiated.

European Commission Vice President for Energy Union Maros Sefcovic, who is in Sofia on Thursday, explained that the Commission cannot take a stand on the sale of CEZ Group's assets in Bulgaria because it is a deal between two private companies. The Commission is interested only to see compliance with the EU principles and legislation. He participated in a conference on the role of NGOs for improving the energy policy and the legal basis in the field of energy and the challenges facing South East Europe.

CEZ's announcement that it had decided to sell its Bulgarian electricity distribution business to Pazardjik-based Inercom Bulgaria triggered political turmoil. While the selling price of the assets has not been formally disclosed, media reports set it at around 340 million euro. The Bulgarian government is aspiring to acquire a stake in CEZ Bulgaria, arguing that it is a strategic company relevant to national security.